Stocks Fell amid Profit Taking

Published on Tuesday, 21 August 2012 18:07 Written by Christopher Lynn

New York, August 21^st (TradersHuddle.com) – Stocks closed lower as participants took a breather from the recent gains, taking profits following the S&P 500 briefly hitting its best level in four years. Technology was the biggest drag on the broad market.

The Dow Jones Industrial Average fell 68.06 points or 0.51%. The S&P 500 index lost 4.96 points, or 0.35%, while the NASDAQ dropped 8.95 points, or 0.29%.

The market started in positive ground, with the S&P 500 flirting with the highest level in four years year amid mostly positive action in overseas markets on ongoing hopes that policymakers will act to lower borrowing costs in the euro zone’s periphery.

Most of the S&P 500 sectors ended in negative territory, with technology, utilities, and consumer staples logging the worst performances, while financials gained for the session. In the technology sector, Apple (NASDAQ: AAPL) lost ¼% to $656.06 after posting a new all-time high of $674.88. The stock turned lower after Investment Research downgraded the stock to a Hold from Buy.

Also in the sector, Verizon (NYSE: VZ) logged the biggest decline with a 1.85% drop, which was the worst performance in the Dow Jones Industrial Average. Meanwhile, First Solar (NASDAQ: FSLR) rallied the most in the sector, jumping 7.5%.

Elsewhere in the technology space, Facebook (NASDAQ: FB) slumped 4.26% to $19.159 following news that early investor and board member Peter Thiel sold most of its holdings on the social media play last week after the first IPO lock out period expired. The controversial sale, sparked rage and concern over the long-term prospects of the company, particularly after the botched IPO, in which the stock has lost half of its value.

In the consumer space, Urban Outfitters (NASDAQ: URBN) surged to the top of the S&P 500, as shares rallied 18.2% to $36.98. The stock logged a new 52-week high after the retailer posted quarterly results that topped expectations and FBR Capital, Janney Capital Markets, and Canaccord Genuity raised their target prices on the stock, while William Blair and Brean Murray upgraded the stock.

On the flip side, Best Buy (NYSE: BBY), the consumer electronics goods and appliances retailer lost 1.38% to $17.91 after its quarterly results missed expectations, as same store sales declined. The company cut its earnings outlook and suspended future earnings guidance.

The energy sector was a mixed bag, with Phillips 66 (NYSE: PSX) tumbling to the bottom of the S&P 500, as shares dropped 3.5% to $41.55, while coal producers saw significant gains after the U.S. Court of Appeals in Washington threw out an Environmental Protection Agency rule over limits on sulfur dioxide and nitrogen oxide emissions. Alpha Natural Resources (NYSE: ANR) led the sector higher, as shares rallied 6.2%, while Peabody Energy (NYSE: BTU) gained 3.7%.

In the healthcare space, Medtronic (NYSE: MDT) slumped 0.75% in the session after the company missed earnings expectations despite posting an increase in profits. Additionally, Medtronic reiterated its profit forecast for fiscal 2013.

Elsewhere, banks helped the financial sector to move into positive territory. Citigroup (NYSE: C) jumped 2.5%, posting the biggest advance in the sector, as the stock has gained nearly 16% after its earnings report in mid-July. JPMorgan (NYSE: JPM) gained 1.8%, posting the biggest gain in the blue chip index, while Bank of America (NYSE: BAC) added 0.5% to $8.19, as the stock continued its breakout from calculated resistance at the $7.90 level. The stock logged a high of $8.40 for the session before pulling back in afternoon trading.