Stocks fell from their all-time highs on Monday, the penultimate trading day of a record-breaking year for equities.
The Dow Jones Industrial Average traded about 185 points lower, while the S&P 500 fell 0.6% and Nasdaq Composite was trading 1% lower. Tech was the worst-performing sector among the 11 S&P 500 groupings.
Some of the biggest winners of the year, including Apple, Microsoft and Visa, all slipped about 1% on Monday as investors took profits. Apple and Microsoft have led the market gains this year, rallying 82% and 55%, respectively.
“The best-performing Q4 sectors are leading to the downside today, and that implies some short-term selling and people positioning before year-end,” said Tom Essaye, founder of the Sevens Report. “The market was very overbought at the end of last week. Nothing really new has occurred to push the market up in the year-end.”
U.S. equities have enjoyed a strong rally in December, with the main indexes hitting record highs last week amid year-end optimism. The S&P 500 has notched five straight weeks of gains, rising 29.2% in 2019. The benchmark is within reach of a historic year, sitting about a percentage point away from having its best year since 1997.
Monday marks day four of the so-called Santa Claus rally period, which has historically given a boost to stocks. The S&P 500 rose 0.5% last week during the shortened holiday trading. Since 1950, the benchmark has rallied an average of 1.3% during the final five trading days of the year and the first two sessions of the new year, according to the Stock Trader’s Almanac.