(Updates to late afternoon, changes byline)
* Financials off with bond yields day before Q4 big bank
* Microsoft, Apple top drag on S&P, Nasdaq
* Merck, Eli Lilly boost health sector
* Indexes down: Dow 0.31 pct, S&P 0.24 pct, Nasdaq 0.37 pct
By Sinead Carew
Jan 12 The three major U.S. stock indexes
declined on Thursday as investors awaited fourth-quarter
earnings and details of President-elect Donald Trump's economic
policy, bringing a pause to a rally driven by his campaign
promises of lower taxes and fiscal stimulus.
While stocks pared losses as the session wore on, all but
three of the S&P 500's eleven sectors were still down, with the
financial sector leading the decline a day ahead of its
first major earnings reports. The S&P had risen 6.4 percent
since the election of Donald Trump as president.
Trump on Wednesday gave no details on tax cuts or
infrastructure spending in his first news conference since the
election. He instead lashed out at U.S. spy agencies and media
companies for what he called a "phony" Russia dossier.
On top of policy uncertainty, the market is missing stock
buyback support in the quiet period ahead of earnings and
individuals are putting more money into bonds than stocks,
according to Jeffrey Kleintop, chief global investment
strategist at Charles Schwab in Boston.
"Companies can't buy shares, and individuals all of a sudden
stopped buying since the election. That could be the reason
we're seeing a little bit of a gap down today," said Kleintop,
but he noted that the dip could be temporary if earnings are
better than expected.
Kleintop cited Investment Company Institute's data on
Wednesday showing the biggest cash flows to bond funds from
stock funds since the election.
At 3 PM ET, the Dow Jones Industrial Average was down
61.13 points, or 0.31 percent, at 19,893.15, the S&P 500
5.4 points, or 0.24 percent, lower at 2,269.92 and the Nasdaq
Composite off 20.68 points, or 0.37 percent, at
The S&P had fallen as much as 0.9 percent earlier in the
session, and its S&P's financial index was down 0.7 percent, as
yields on long-dated bonds fell.
The telecommunications and real estate sectors were the best
performers with 0.7 and 0.3 percent increases, respectively, as
so-called bond substitute sectors reacted to changes in yields.
The S&P's healthcare sector clung to a 0.08 percent
increase after tumbling 1 percent in the previous day's
The index was helped by a 1.4 percent increase for Merck
after multiple broker upgrades and a 2.9 percent
increase for Eli Lilly after a U.S. appeals court said
it could block Teva Pharmaceutical Industries Ltd from
selling a generic equivalent of its top-selling lung cancer
Microsoft fell 1 percent and Apple dropped
0.6 percent, making them the biggest drags on the S&P.
Declining issues outnumbered advancing ones on the NYSE by a
1.54-to-1 ratio; on the Nasdaq, a 1.97-to-1 ratio favored
The S&P 500 posted nine 52-week highs and four new lows; the
Nasdaq Composite recorded 51 new highs and 20 new lows.
(Additional reporting by Yashaswini Swamynathan in Bengaluru;
Editing by Savio D'Souza and Steve Orlofsky)