U.S. equities drifted lower in quiet trading on Monday, an anticlimactic start to the week after Friday’s trading nearly took the Dow Jones Industrial Average over the 20,000 threshold. Although the bulls came within one point of the hurdle there was simply no follow through today.
In the end, the Dow lost 0.4%, the S&P 500 Index dropped 0.4%, the Nasdaq Composite wafted up 0.2% and the Russell 2000 finished down 0.7%. Treasury bonds were firmer, the dollar was lower, gold gained 1% to finish at its best level since late November and oil was weaker on Iraq production reports and U.S. drilling activity, losing 3.8%.
The cautious trading lifted the new defensive positions recommended to subscribers last week, with the ProShares Ultra Treasury Bond (NYSEARCA:UBT) climbing 1.5% for Edge readers. Healthcare stocks led the way with a 0.4% gain while energy and utilities were the laggards, down 1.5% and 1.1%, respectively.
Animal health provider VCA Inc (NASDAQ:WOOF) surged more than 28% after agreeing to be acquired by Mars, Inc. in a $9 billion deal representing a 31% premium to the pre-announcement share price. Stage Stores Inc (NYSE:SSI) fell 17.3% after a negative fourth-quarter earnings preannouncement with holiday comp-store sales down 7.3% versus guidance for a 2.6% decline.
Technically, breadth remains a problem and suggests the post-election upsurge is quickly running out of steam. The 20-day moving average of the NYSE advance-decline line has rolled over to levels not seen since late November, down 75% from the highs seen in early December.