S&P 500 dips after 7-day rally; Dow edges up to record high

By Caroline Valetkevitch

NEW YORK (Reuters) - The S&P 500 ended lower on Tuesday, breaking a seven-session string of gains as investors pulled back from technology and financials, but the Dow eked out the smallest of gains to finish at another all-time closing high.

The Dow also hit another lifetime intraday high, while the S&P 500 remains within reach of its all-time closing high of 1,565.15, set on October 9, 2007.

The market's rally in recent months has driven the Dow up 10.3 percent for the year and lifted the S&P 500 by 8.9 percent for 2013 so far. Signs of improvement in the economy and the Federal Reserve's quantitative easing have helped to propel the advance.

Tech shares, which have lagged the rally, pulled indexes lower as heavyweights such as Apple and Google tumbled. Financials also underperformed the broader market on Tuesday, with the S&P 500 financial index <.spsy> down 0.6 percent.

"You have a little bit of buyers' exhaustion at this juncture. We've had this move that has been startlingly smooth in terms of progression of advances, both since the beginning of the year and certainly over the last six to seven trading sessions," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

"Investors are waiting for this collective correction ... for some time, and it's teasing more and more buyers out of the market."

The Dow Jones industrial average <.dji> rose just 2.77 points, or 0.02 percent, to 14,450.06, another record close. Earlier, the Dow climbed to a lifetime intraday high of 14,478.80.

The Standard & Poor's 500 Index <.spx> dipped 3.74 points, or 0.24 percent, to finish at 1,552.48 - about 13 points below its record closing high.

The Nasdaq Composite Index <.ixic> slipped 10.55 points, or 0.32 percent, to close at 3,242.32.

Apple dropped 2.2 percent to $428.43. An analyst said the company has a 25 percent chance of missing its quarterly revenue forecast as iPhone sales slow.

Google fell 0.9 percent to $827.61, while the S&P tech sector <.splrct> lost 0.6 percent.

After a light economic calendar the last couple of days, investors will turn their attention to retail sales data on Wednesday to get a sense of how consumers are faring. Sales are expected to have increased 0.5 percent in February.

Adding to Tuesday's weakness, Jens Weidmann, head of the Bundesbank and a member of the European Central Bank's governing council, said the euro-zone crisis was not over.

Pullbacks during the rally so far this year have not been too deep as investors look for a good place to buy. Market moves have often been muted in recent days, even as stocks have ground higher.

The S&P healthcare sector index <.spxhc> rose 0.4 percent and hit a fresh 52-week high at 519.97. Traditionally considered a defensive bet, the healthcare sector has been one of the leaders of the rally so far this year. It has gained 12.2 percent since December 31.

In the short term, however, healthcare appears to be overbought, suggesting investors may start to put their money elsewhere or take profits. Based on the relative strength index, healthcare has been overbought since the beginning of the month.

The S&P financial sector index <.spsy> and the S&P consumer discretionary sector index <.splrcd> are on the cusp of overbought territory, while the S&P consumer staples sector index <.splrcs> is just over the line in overbought territory.

In comparison, the S&P tech sector index <.splrct>, though, is not considered overbought; it ended down 0.6 percent on Tuesday.

Among the day's gainers, J.C. Penney Co Inc shares rose 4 percent to $15.65 amid talk that the department store chain's chief executive, Ron Johnson, might step down soon. A company representative, however, said there was no basis to market rumors that circulated Tuesday that Johnson might resign.

In another bright spot, Merck shares gained 3.2 percent to $45.04 after the pharmaceutical company said an outside board had allowed it to continue a trial assessing its Vytorin cholesterol drug.

Volume was below average, with roughly 5.82 billion shares trading on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Decliners outpaced advancers on the NYSE by a ratio of about 3 to 2 and, on the Nasdaq, by about 7 to 5.

(Additional reporting by Leah Schnurr, Editing by Kenneth Barry and Jan Paschal)

Source: http://news.yahoo.com/stock-index-futures-signal-lower-wall-street-open-090509900--finance.html

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