NEW YORK (REUTERS) - Wall Street paused its rally on Tuesday (Jan 16), weighed down by weakness in General Electric shares and as lower oil prices dragged down the energy sector.
The energy sector fell 1.2 per cent as Brent crude oil shed some of its recent gains, falling nearly US$1 per barrel. Industrials and materials were the other major laggards on the S&P, down 0.9 per cent and 1.2 per cent, respectively.
General Electric fell 2.9 per cent after raising the prospect of breaking itself up and announcing more than US$11 billion (S$14 billion) in charges from its long-term care insurance portfolio and new US tax laws.
The CBOE Volatility index, a widely followed measure of market anxiety, rose to a more than one-month high of 11.66.
"Lower energy prices are taking us down a little bit," said Tracie McMillion, head of global asset allocation strategy at Wells Fargo Investment Institute in Winston-Salem, North Carolina.
But, she added, "investors are continuing to move into equities as they see returns. It's feeding on itself, becoming a virtuous cycle, enticing more people in."
The Dow Jones Industrial Average fell 10.33 points, or 0.04 per cent, to 25,792.86, the S&P 500 lost 9.82 points, or 0.35 per cent, to 2,776.42 and the Nasdaq Composite dropped 37.38 points, or 0.51 per cent, to 7,223.69.
Earlier on Tuesday, the Dow Jones Industrial Average had broken above the 26,000 mark for the first time as fourth-quarter earnings season got off to a strong start following upbeat results from UnitedHealth and Citigroup.
UnitedHealth rose 1.9 per cent after the largest US health insurer reported results that beat estimates and raised its 2018 earnings outlook.
More than three quarters of the 30 S&P 500 companies that have reported so far have topped profit estimates, according to Thomson Reuters I/B/E/S.
"You'd typically see and expect the markets to interpret that in a positive manner, but a lot of indices have moved back. What's held them back seems to be company-specific," said Shawn Cruz, senior trading specialist at TD Ameritrade in Chicago, making reference to General Electric.
Cruz added that the Federal Reserve Bank of New York's business conditions index, which came in slightly below expectations on Tuesday, may have also contributed to Wall Street's dip.
Merck surged 5.8 per cent after early results from a key study showed its blockbuster drug Keytruda and two chemotherapy medicines helped lung cancer patients live longer and stopped the disease from advancing.
Viacom fell 7 per cent after sources told Reuters CBS Corp and the company were not in active merger discussions.
Declining issues outnumbered advancing ones on the NYSE by a 2.04-to-1 ratio; on Nasdaq, a 2.18-to-1 ratio favoured decliners.
The S&P 500 posted 170 new 52-week highs and six new lows; the Nasdaq Composite recorded 243 new highs and 29 new lows.
Volume on US exchanges was 8.30 billion shares, compared to the 6.48 billion average over the last 20 trading days.