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S&P 500 falls slightly, snapping 6-day winning streak

The S&P 500 dipped slightly from a record high on Tuesday as the market’s strong rally in February took a pause.

The broad equity benchmark fell 0.1% to 3,911.23, halting a six-day winning streak. The Dow Jones Industrial Average slipped 9.93 points, or less than 0.1%, to 31,375.83, posting its first daily loss in seven sessions. The Nasdaq Composite bucked the downtrend to end 0.1% higher at a record close of 14,0007.70.

The Russell 2000 rose 0.4% to another all-time high, extending its 2021 rally to more than 16%. The small-cap benchmark has been outperforming the S&P 500 as beaten-down value names rotated into favor.

Investors could be taking some chips off the table following a strong rally boosted by optimism for a smooth reopening amid the Covid vaccine rollout. Cyclical sectors, which had outperformed in recent weeks, led the declines. Energy fell 1.5%, paring its month-to-date gains to 11.1%. Materials also registered losses.

Bank of America said a market correction could be on the horizon as the recent runup has shown signs of overheating, but it will be a buying oppotutinity for equity investors.

“We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and ‘as good as it gets’ earnings revisions,” Jared Woodard, investment and ETF strategist at Bank of America, said in a note.

 Reference: CNBC