NEW YORK - Stocks took a breather Tuesday after U.S. markets notched another record high the day before.
The Dow Jones industrial average fell
48 points, or 0.3 percent, to 15,977 as of 12:10 p.m. ET. The Standard
& Poor's 500 index lost five points, or 0.3 percent, to 1,803. The Nasdaq
composite lost nine points, or 0.2 percent, to 4,059.
The S&P 500 closed at another
record high Monday. While the market continues to test new heights, few
investors believe stocks will move significantly higher from these levels in
the short run.
"It's quiet, and the only trading
that will go on the rest of this year will be people selling for tax reasons
and window dressing," said Jack Ablin, chief investment officer for BMO
Private Bank, which manages $66 billion of assets.
It's a common practice for portfolio
managers, in the last couple weeks of the year, to wind down their positions,
sell off poor-performing stocks and try to make their portfolios look as good
as they possibly can when they mail their year-end statements to investors. On
Wall Street, the practice is sometimes called "window dressing."
Banking stocks were mostly higher
after investors got some clarity on new regulations.
Federal regulators voted to approve
the Volcker Rule, which bars banks from betting on the market with their own
money. The Federal Deposit Insurance Corporation, the Securities and Exchange
Commission and other federal agencies approved the rule, which will go into
effect by July 2015 for the largest U.S. banks.
Goldman Sachs was up $2.48, or 1.5
percent, to $179.16 while Morgan Stanley was up 36 cents, or 1 percent, to $30.75.
The Volcker Rule is part of the
Dodd-Frank financial reform law passed in 2010 in the aftermath of the
financial crisis. It was named after Paul Volcker, a former Fed chairman who
was an adviser to President Barack Obama.
One of the few remaining events on the
economic calendar for this year is the Federal Reserve's two-day policy meeting
next week. The Fed is widely expected to wind down its stimulus program in the
coming months, but few investors expect it will do it next week with the
holiday season and end of the year approaching.
Economists expect the Fed to start pulling back, or "tapering," its economic stimulus in the first three months of 2014.
"No matter how you look at it,
tapering is on its way," said Quincy Krosby, market strategist with
In other corporate news, Lululemon Athletica's founder said he would relinquish the company's chairmanship after
his comments about body type of potential customers raised some ire. The yoga
retailer fell 48 cents, or 0.7 percent, to $69.89.
General Motors named Mary Barra as its next CEO. She will replace Dan Akerson and will be the first woman to run a
major U.S. car company. GM slipped 27 cents, or 0.7 percent, to $40.63.