Agence France-Presse
7:42 am | Friday, January 3rd, 2014
In this Dec. 31, 2013, file photo, a trader wears glasses celebrating the new year while working on the floor at the New York Stock Exchange in New York. US stocks Thursday, Jan. 2, kicked off the new year in the red, falling decisively in a sell-off that analysts chalked up to profit taking following solid gains in 2013. AP
NEW YORK—US stocks Thursday kicked off the new year in the red, falling decisively in a sell-off that analysts chalked up to profit taking following solid gains in 2013.
The Dow Jones Industrial Average fell 135.31 points (0.82 percent) to 16,441.35.
The S&P 500 declined 16.38 (0.89 percent) to 1,831.98, while the tech-rich Nasdaq Composite Index gave up 33.52 (0.80 percent) at 4,143.07.
Markets were closed Wednesday in observance of the New Year’s Day holiday.
Analysts said investors likely took the first day of trading of 2014 as an opportunity to rebalance portfolios after markets surged last year, pushing the S&P 500, a broad measure of the markets, up nearly 30 percent.
A typical strategy is to wait to rebalance until a new tax year, said Sam Stovall, chief investment officer at S&P Capital IQ.
“The thought is you probably take some of those profits and redeploy them in areas that did not do as well in the prior calendar year,” Stovall said.
The retreat came despite reports that showed the strongest US construction spending in four years and a solid reading on US manufacturing activity. Tempering that data was a mediocre report on Chinese manufacturing activity, Stovall said.
Technology giant Apple shares fell 1.4 percent after Wells Fargo downgraded the stock on concerns about its profit-margin outlook.
Online professional networking service LinkedIn lost 4.2 percent after Citigroup cautioned that tracking information on LinkedIn activity suggested “near-term caution” on the stock.
Bank of America jumped 3.4 percent after Citigroup upgraded the stock. Bank of America is well-positioned as a “play” on a US economic recovery due to its “exposure” to its US consumer base, Citi said.
Martha Stewart Living Omnimedia vaulted 8.8 percent after it and retailer Macy’s announced a settlement of Macy’s lawsuit alleging Stewart violated a merchandising agreement by striking a deal with retail rival J.C. Penney. The terms of the settlement were not disclosed. Shares in Macy’s were unchanged.
Bond prices rose. The yield on the 10-year US Treasury bond fell to 2.99 percent from 3.03 percent Tuesday, while the 30-year dipped to 3.92 percent from 3.96 percent. Bond prices and yields move inversely.
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