The S&P 500 extended its winning streak for 2018 on Monday although its advance slowed to a crawl as the healthcare and financial sectors weighed, while attention was directed to the upcoming start of the quarterly earnings season.
The healthcare sector was the S&P’s worst performer on Monday, and investors were cautious about pouring money into bank stocks before the companies kick off the fourth-quarter earnings season later this week.
The three major indexes kicked off 2018 with their strongest first four trading days in more than a decade, according to Reuters data. The Dow Jones Industrial Average had its strongest start since 2003, and the Nasdaq and S&P 500 had their strongest starts since 2006.
Historically, the first five trading days of January can be an indicator for the market’s direction for the full year, according to the Stock Traders Almanac.
The S&P 500’s healthcare sector ended 0.4 percent lower. Last week it rose 3.2 percent.
The Nasdaq biotech index fell 1.4 percent, on track for its largest one-day percentage decline since mid-December, led by a 3.7 percent decline in Biogen and a 3.3 percent decline in Regeneron Pharmaceuticals.
A 0.4 percent decline in the banking sector pressured the broader financials index, which fell 0.1 percent. One key reason is a current lack of details regarding the impact of the new corporate tax cuts in fourth-quarter earnings calls when the reporting season begins later in the week.
Wells Fargo and Citigroup fell more than 1 percent while Goldman Sachs declined 1.5 percent. Most large lenders have estimated one-off charges to their fourth-quarter earnings because of tax cuts.
Utilities were the S&P’s largest percentage gainers, regaining some ground lost in the previous week along with real estate.
Caterpillar chalked up a gain of 2.5 percent to close at $166.03, just below a record high set earlier in the day, after JP Morgan upgraded the stock saying the tax overhaul could help North America’s construction business cycle extend in 2018.
Kohl’s rose 4.7 percent after the department store operator posted far stronger same-store sales for the holidays than its bigger peers.
GoPro fell 12.8 percent to end the trading day at $6.56 after the company said it would be open to a sale but is not actively pursuing one. Earlier in the day, the shares lost about a third of their value, hitting a record low at $5.04, after GoPro announced preliminary fourth-quarter revenue that was well below expectations and said it would exit the drone business.
Approximately 6.36 billion shares changed hands on the major domestic equity exchanges on Monday, as compared to the 6.28 billion share full session average over the past 20 trading days.