Wall Street pulled back from record highs on Monday, with the Dow Jones Industrial Average and the S&P 500 indexes chalking up their largest one-day percentage declines in about five months, weighed down by a slide in Apple shares.
The Dow and S&P 500 had their largest daily percentage declines since September 5. The S&P 500 still is up 6.7 percent since the end of 2017 as Apple fell 2.1 percent on news that the company will halve production of its $999 iPhone X smartphone. The company is due to report earnings on Thursday.
The S&P technology index fell 0.9 percent and was the largest drag on the benchmark index following Wall Street’s strongest four-week run since 2016.
The CBOE Volatility Index ended the trading day up 2.76 points, or nearly 25 percent, at 13.84, its highest close since August 18.
The 10-year Treasury note hit its highest yield since 2014 due to economic strength, which added to pressure on defensive sectors such as utilities, real estate and telecoms.
It was a rocky start to an action-packed week, which will feature President Trump’s first official State of the Union speech late Tuesday.
Ahead this week is the Federal Reserve’s meeting, the employment report and earnings from a host of high-profile names including Amazon, Alphabet and Facebook.
Fourth-quarter earnings growth for the S&P 500 is now seen at 13.2 percent, up from 12 percent at the beginning of the year, according to Thomson Reuters data. Of the companies that have reported, about 80 percent have exceeded Street expectations.
Aside from higher yields, telecom stocks also slipped on reports that the government was considering building a 5G wireless network to guard against spying.
AT&T fell 1.5 percent, Verizon was down 1.1 percent and Sprint’s shares chalked up a loss 1.9 percent.
The Dr Pepper Snapple Group climbed to an all-time high after K-cup maker Keurig Green Mountain said it would acquire the company in a deal worth more than $21 billion. The stock closed up 22.4 percent at $117.07.
Approximately 7.1 billion shares changed hands on the major domestic equity exchanges, as compared to the 6.9 billion daily average for the past 20 trading days, according to Thomson Reuters data.