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 2.78 points, or 0.2%,
to 1,500.18. The material sector led losses and technology was the
best performing of its 10 major sectors.
Shares of Jos. A Bank Clothiers Inc. (JOSB) fell nearly 18%
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.
AK Steel Holding Corp. (AKS) and Century Aluminum Co. (CENX)
retreated after Goldman Sachs downgraded shares of both companies
to sell from neutral.
The Dow Jones Industrial Average (DJI) shed 16.50 points, or
0.1%, at 13,879.48, with Caterpillar (CAT) leading gains among 11
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 2.87 points, or 0.1%,
to 3,152.62.
For every two shares rising, three slipped on the New York Stock
Exchange, where 289 million shares traded as of 1:10 p.m. Eastern
time. Composite volume neared 1.8 billion.
Stocks relinquished what had been tepid gains after the National
Association of Realtors said that pending home sales declined 4.3%
last month.
"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.
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