After all, there are those who feel that equities are quite overvalued so it really should be hailed as good news whenever there is a pullback such as occurred today, as they said the “worst one-day fall in five months.”  The Dow dropped 177, the others had similar percentage declines, and the VIX “anxiety” index went up 25 percent on heavy volume of 7.1 billion shares.  But really, isn’t this just letting a little air out of the tire so shouldn’t it be a source of relief for investors?  This is just the beginning of a very event-filled week.  Let’s see how it all unfolds. 

mon  JANUARY 29, 2018 / 5:44 pM

Dow, S&P 500 suffer worst one-day fall in five months as Apple drags

Stephen Culp

DJ:  26,439.48  -177.23       NAS: 7,466.51  -39.27        S&P:  2,853.53  -19.34      1/29

NEW YORK (Reuters) - Wall Street pulled back from record highs on Monday, with the Dow and the S&P 500 indexes marking their biggest one-day percentage declines in about five months, weighed down by a slide in Apple shares.

Shares of Apple (AAPL.O) fell 2.1 percent on news that the company will halve production of its $999 iPhone X smartphone. The company is due to report earnings on Thursday.

“The market’s responding to the question of what Apple’s earnings are going to look like, specifically what kind of guidance are they going to give on iPhone X sales,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

The S&P technology index .SPLRCT fell 0.9 percent and was the biggest drag on the benchmark index following Wall Street’s strongest four-week run since 2016.

The Cboe Volatility Index .VIX, the most widely followed barometer of expected near-term volatility for U.S. stocks, closed up 2.76 points, or nearly 25 percent, at 13.84, its highest close since Aug. 18. “We’ve had a long run in the stock market, and we’ve seen some unease, but that could be reversed with a couple of good days,” said Hellwig.  Benchmark U.S. 10-year Treasury note US10YT=RR yields hit their highest since 2014 due to economic strength, which added to pressure on defensive sectors such as utilities, real estate and telecoms. 

The Dow Jones Industrial Average .DJI fell 177.23 points, or 0.67 percent, to 26,439.48, the S&P 500 .SPX lost 19.34 points, or 0.67 percent, to 2,853.53 and the Nasdaq Composite .IXICdropped 39.27 points, or 0.52 percent, to 7,466.51.  The Dow and S&P 500 had their biggest daily percentage declines since Sept. 5. The S&P 500 still is up 6.7 percent since the end of 2017. 

It was a rocky start to an action-packed week, which will feature U.S. President Donald Trump’s first official State of the Union speech late Tuesday.  Also ahead this week is the Federal Reserve’s meeting, the U.S. employment report and earnings from a host of high-profile names including Amazon.com (AMZN.O), Alphabet (GOOGL.O) and Facebook (FB.O). 

Fourth-quarter earnings growth for the S&P 500 is now seen at 13.2 percent, up from 12 percent at the beginning of the year, according to Thomson Reuters data. Of the companies that have reported, about 80 percent have beaten Wall Street expectations.  Aside from higher yields, telecom stocks also slipped on reports that the U.S. government was considering building a 5G wireless network to guard against spying. 

AT&T (T.N) was down 1.5 percent, Verizon (VZ.N) slipped 1.1 percent and Sprint (S.N) pulled back by 1.9 percent.  Dr Pepper Snapple Group (DPS.N) jumped to an all-time high after K-cup maker Keurig Green Mountain said it will buy the company in a deal worth more than $21 billion. The stock ended up 22.4 percent at $117.07. 

Declining issues outnumbered advancing ones on the NYSE by a 4.65-to-1 ratio; on Nasdaq, a 2.16-to-1 ratio favored decliners.  The S&P 500 posted 126 new 52-week highs and three new lows; the Nasdaq Composite recorded 153 new highs and 29 new lows.

About 7.1 billion shares changed hands on U.S. exchanges. That compares with the 6.9 billion daily average for the past 20 trading days, according to Thomson Reuters data.