U.S. stocks finished slightly lower Tuesday as a decline in Apple Inc. more than offset postholiday gains in the retail sector and a surge in crude-oil futures that took the commodity to a 2½-year high.
What are equity indexes doing?
The Dow Jones Industrial Average DJIA, -0.03% traded down 7.85 points, or less than 0.1%, to 24,746.21. Apple’s share decline was cutting about 30 points from the price-weighted benchmark and weighing on the broader tech sector. The S&P 500 index SPX, -0.11% meanwhile, lost 2.84 points, or 0.1%, at 2,680.50. A surge in crude-oil futures helped the energy sector XLE, +0.88% , up 0.8%, post the best daily performance among the S&P 500’s 11 sectors.
The Nasdaq Composite Index COMP, -0.34% declined 23.71 points, or 0.3%, at 6,936.25.
Last week, the Dow and the S&P 500 posted a fifth straight week of gains ahead of the holiday, gaining 0.4% and 0.3%, respectively. The Nasdaq rose 0.3% as well for the week.
What’s driving the market?
In a holiday shortened stretch, with most global markets closed Monday, volumes were low, given that many traders are likely to remain on vacation until after the New Year’s holiday. European markets were closed Tuesday in observance of Boxing Day.
Retailers enjoyed sharp gains on reports of a post-Christmas sales bounce. Shares of Macy’s Inc. M, +4.60% rose 4.6%, Kohl’s Corp. KSS, +5.98% rallied 6%, while shares of Wal-Mart Stores Inc. rose 1%. Sales, excluding automobiles, rose 4.9% from Nov. 1 through Dec. 24, compared with a 3.7% gain in the same period last year, according to the Mastercard Inc. MA, +0.29% .
Last week, Republicans passed the most sweeping overhaul of the U.S. tax code in 30 years as well as a stopgap spending bill to keep the government funded into early 2018, which is still influencing trading strategy going into 2018.
Meanwhile, the S&P Case-Shiller 20-city home-price index was up 6.4% from year ago in October.
What are market participants saying?
Joseph Saluzzi, co-founder and co-head of trading at Themis Trading, said he expects a trend of stock buying going forward, supported by an expectation of fiscal stimulus like tax cuts to continue into next year.
“If the same feel as this year is anticipated,” Saluzzi said, referring to an anticipated increase in corporate spending and additional stimulus measures by the government, including infrastructure spending. “Why would you fight [the market], especially on the big-cap stocks? Right now, there is really nothing else getting in the way of [markets rising],” he said.
“What we are seeing here is no real shift in sentiment, but a shift in leadership, and I think that is positive going into the New Year,” said Peter Cardillo, chief market economist at First Standard Financial, referring to the slide in tech and gains in energy and retail on Tuesday, against the backdrop of year-to-date gains in the main equity benchmarks.
See: MarketWatch’s economic calendar
Which stocks are in focus
Apple AAPL, -2.54% shares ended down 2.5%. A few of the iPhone maker’s suppliers declined in Taiwan over a report of tepid iPhone X demand.
Need to know: The Apple ‘X’ factor that could deliver new year stress for investors
Global specialty pharmaceuticals group Mallinckrodt PLC MNK, +0.69% announced a deal to buy Sucampo Pharmaceuticals Inc. SCMP, +5.88% in a deal valued at $1.2 billion, including debt. Shares of Sucampo finished up almost 6%, and Mallinkrodt shares gained 0.7%.
What are other markets doing?
Oil futures CLG8, -0.28% surged on reports of supply disruptions in the Middle East and Europe, while gold GCG8, +0.14% settled at its highest level in four weeks as the dollar index DXY, -0.14% softened around 93.24. A weaker dollar tends to be supportive for commodities trading in the currency, like gold and oil.
Bitcoin futures BTCF8, +2.28% , meanwhile, were trading around $16,000 as the cryptocurrency was also swinging higher Tuesday.