US stocks drop amid warnings of a pullback

AFPJuly 7, 2014
A trader works on the floor of the New York Stock Exchange during the morning of July 3, 2014 in New York City
A trader works on the floor of the New York Stock Exchange during the morning of July 3, 2014 in New York City (AFP Photo/Andrew Burton)

New York (AFP) - US stocks fell Monday, retreating from last week's records as analysts pointed to profit taking and to predictions from some experts that the market was due for a pullback.

The Dow Jones Industrial Average fell 44.05 points (0.26 percent) to 17,024.21.

The broad-based S&P 500 dropped 7.79 (0.39 percent) to 1,977.65, while the tech-rich Nasdaq Composite Index declined 34.40 (0.77 percent) to 4,451.53.

Some market watchers expressed nervousness at the latest surge in equity prices that last week lifted the Dow above 17,000 for the first time.

Nobel prize-winning economist Joseph Stiglitz said in a television interview that he was "very uncomfortable" with current stock prices, while Raymond James managing director Jeffrey Saut said in a note that stocks are vulnerable to a 10-12 percent decline in the weeks ahead.

"We've had a good run here," said Art Hogan, chief market strategist at Wunderlich Securities, who also cited profit taking for the selling.

"When we reach these milestones, we tend to spend a little while consolidating around them."

Apple jumped 2.1 percent following a report by Cantor Fitzgerald that said data from Apple's Taiwan-based suppliers suggest that the tech giant's June sales were better than usual for this time of year.

Apple also reportedly hired Patrick Pruniaux, a top executive from luxury watch maker Tag Heuer, in an unspecified role. The move comes ahead of an expected launch later this year of the iWatch.

GT Advanced Technology, which provides cover glass for Apple products, sank 15.6 percent after Canaccord Genuity said in a note that it does not expect Apple's first iPhone 6 smartphones will use GT's sapphire glass.

Agricultural products company Archer Daniels Midland advanced 1.6 percent as it announced it would acquire Switzerland-based Wild Flavors GmbH, a flavor and ingredient company, for 2.3 billion euros ($3.1 billion).

Delta Air Lines fell 4.4 percent as it announced that it was cutting its flights to Venezuela to just one a week amid a dispute over Caracas's unpaid $4.2 billion debt to international airlines.

American Airlines, which has also cut back in Venezuela, dropped 3.7 percent.

Bond prices rose. The yield on the 10-year US Treasury dipped to 2.62 percent from 2.65 percent Thursday, while the 30-year dropped to 3.44 percent from 3.48 percent. Bond yields and prices move inversely..