By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks traded close to their
five-year highs Monday after a trade group said pending home sales
dropped last month, equipment maker Caterpillar Inc. posted
profitable results and orders rose for durable goods in
December.
The market's recent win streak left equities primed for a
retreat. "We've been up eight days in a row; this can't go on
forever," Dan Greenhaus, chief global strategist at BTIG LLC, said
of the S&P 500 Index's longest win streak in more than eight
years.
Greenhaus added he would welcome "a modest downturn of 5% to
7%," adding that such a dip would be"preferable considering the
fiscal difficulties that are set to occur in the spring" -- a
reference to the coming showdown over automatic budget cuts set to
start March 1.
After finishing above 1,500 last week for the first time since
December 2007, the S&P 500 (SPX) was off 2.44 points, or 0.2%,
to 1,500.52. The material sector led losses and technology was the
best performing of its 10 major sectors.
AK Steel Holding Corp. (AKS) and Century Aluminum Co. (CENX)
retreated after Goldman Sachs downgraded shares of both companies
to sell from neutral.
Shares of Jos. A Bank Clothiers Inc. (JOSB) fell 17% after the
men's apparel maker late Friday projected that yearly profit would
decline 20% from last year, with sales cut by unseasonably warm
weather.
The Dow Jones Industrial Average (DJI) shed 9.56 points, or
0.1%, at 13,886.42, with Caterpillar (CAT) leading gains among 12
of its 30 components.
The Commerce Department reported that U.S. orders for durable
goods climbed 4.6% last month.
While the jump in durable-goods orders for December is a welcome
one, the picture painted by Caterpillar is "telling you a little
bit more about the global story," according to Greenhaus.
The Nasdaq Composite Index (RIXF) advanced 5.69 points, or 0.2%,
to 3,155.53.
"The market is a mixed bag, technically speaking today," emailed
Elliot Spar, market strategist at Stifel Nicolaus, who pointed to
Apple Inc.'s (AAPL) rise as behind the Nasdaq being in positive
terrain. Shares of the iPhone maker were lately up 1.8%.
"We have a number of technical 'issues' at the moment and if
they sustain for another day, it could be the catalyst for the long
overdue pullback," Spar concluded.
"There are a number of indicators that lead us to believe a
market pause is more likely than not, but making the case for a
sustained downside is difficult to do," said Greenhaus. "The bias
is to the upside, complacency is high and yields are pushing
up."
Treasury prices fell, pushing 10-year yields (10_YEAR) to 2% for
the first time since April, on the view the U.S. economy is
improving.
For every three shares rising, roughly four slipped on the New
York Stock Exchange, where 324 million shares traded as of 2 p.m.
Eastern time. Composite volume topped 2 billion.
Stocks relinquished what had been tepid gains after the National
Association of Realtors said that pending home sales declined 4.3%
last month. Home builders were hit in the wake of the trade group's
report, with PulteGroup Inc. (PHM) off 3.7% and shares of D.R.
Horton Inc. (DHI) down 2.6%.
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