By Yashaswini Swamynathan
The three major U.S. stocks hit record intraday highs for the second straight day on Tuesday, with the Dow topping 19,000, before pulling back sharply as healthcare stocks tumbled.A sharp rally out of the gates saw the S&P 500 breaching 2,200 and the small-cap Russell 2000 index hitting an intraday high for the fourth day in a row before the euphoria faded.U.S. stocks have rallied since Donald Trump's election win as his policies, including promises of tax cuts, higher spending on infrastructure and simpler regulations in the banking and healthcare industries, are seen beneficial for the market.But some market participants question if the rally is sustainable."I call the next phase here the blowout phase because I do not think market valuations are bargain-based. I could see some profit taking in the next couple of days," said Sander Read, chief executive of Lyons Wealth Management in Winterpark, Florida.The S&P 500 is trading near 17.3 times forward 12-month earnings, above the 10-year median of 14.7 times, according to StarMine data.
"If we see the indexes close above the 19,000 and 2,200 levels, that would say we are going to move higher. I don't think we're going to see that in the next day or two. I think there might be selling around that level," said Brad McMillan, chief investment officer at Commonwealth Financial.Seven of the 11 major S&P 500 sectors were trading higher on Tuesday, with the consumer discretionary index's 1.06-percent gain boosting the broader index the most.The healthcare sector was off 1.95 percent, leading the decliners and set for their biggest one-day drop in nearly a month.At 12:18 a.m. ET (1718 GMT), the Dow Jones Industrial Average was up 14.52 points, or 0.08 percent, at 18,971.21. It hit an all-time high of 19,014.73.
The S&P 500 was down 2.35 points, or 0.11 percent, at 2,195.83, reversing course after hitting a high of 2,203.56.The Nasdaq Composite was up 7.24 points, or 0.13 percent, at 5,376.10, after touching a high of 5,392.26.The Dow took 121 trading days to move to 18,000 points from 17,000, but has since crawled along, taking another 483 days to breach 19,000.
Among the consumer discretionary index's top drivers was Dollar Tree, which surged 9.7 percent to $89.98 after the dollar-store chain reported a better-then-expected quarterly profit.Medtronic tumbled 10.2 percent to $72.33 after the medical device maker reported quarterly revenue that missed expectations and cut its full-year adjusted earnings forecast.Advancing issues outnumbered decliners on the NYSE by 1,775 to 1,112. On the Nasdaq, 1,431 issues rose and 1,305 fell.The S&P 500 index showed 48 new 52-week highs and six new lows, while the Nasdaq recorded 226 new highs and 15 new lows. (Reporting by Yashaswini Swamynathan and Tanya Agrawal in Bengaluru; Editing by Anil D'Silva and Savio D'Souza)
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Updated Date: Nov 23, 2016 00:00 AM