NEW YORK (REUTERS) - The Dow hit a record closing high on Tuesday (Oct 2), but another drop in Facebook shares weighed on both the S&P 500 and Nasdaq, driving both to finish in the red.
Dividend-paying sectors were the best performers of the major S&P sectors, with utilities up 1.3 per cent and consumer staples up 0.6 per cent. Facebook, Netflix and Amazon, part of the so-called FANG group of stocks, kept the Nasdaq in check.
The Dow was boosted by names such as Boeing and Caterpillar as investors remained upbeat on trade-sensitive companies following the deal negotiated between the United States, Canada and Mexico.
Facebook fell 1.91 per cent, in a third straight session of declines totaling 5.6 per cent. The social media company, which on Friday disclosed its worst security breach ever, faces continuing calls for legislation to force technology firms to take responsibilities for online security seriously.
"These are all good companies that have incredibly high valuations so they are susceptible to the flu," said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.
"It is easy to create fear in these names, given the valuations and this Facebook story, that is bleeding over to these other names."
The Dow Jones Industrial Average rose 122.73 points, or 0.46 per cent, to 26,773.94, the S&P 500 lost 1.16 points, or 0.04 per cent, to 2,923.43 and the Nasdaq Composite dropped 37.76 points, or 0.47 per cent, to 7,999.55.
The NYSE FANG+TM index, an equal-weighted index of five core FANG stocks, was down 4.2 per cent for September.
The smallcap Russell 2000 index was off 1.01 per cent. Smaller names, which had been viewed as being more insulated to trade pressures, are losing their luster following Sunday's late-night North American trade agreement. The index is now down nearly 5 per cent from its Aug 31 high.
Financials were little changed, shaking off earlier losses stemming from a drop in Italian banks after a senior lawmaker in one of Italy's ruling parties said most of the country's economic problems would be resolved if it readopted a national currency.
"That is really a blip, it definitely doesn't bleed through to the US financial infrastructure," said Peter Kenny, founder of Kenny's Commentary and Strategic Board Solutions in New York.
PepsiCo lost 1.8 per cent as disappointing margins due to higher commodity and transport costs overshadowed a quarterly profit that beat estimates.
Declining issues outnumbered advancing ones on the NYSE by a 1.54-to-1 ratio; on Nasdaq, a 2.16-to-1 ratio favoured decliners.
The S&P 500 posted 20 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 35 new highs and 124 new lows.
Volume on US exchanges was 7.19 billion shares, compared to the 6.93 billion average for the full session over the last 20 trading days.