By Joseph Adinolfi and Wallace Witkowski, MarketWatch
Target, Kohls, Wal-Mart and J.C. Penney tumble
U.S. stocks traded within a narrow range Wednesday, facing pressure as weakness in transportation and retail shares offset advancing financial shares.
The Dow Jones Industrial Average traded within a 89-point range, and was last down 37 points, or 0.2%, to 19,790, as shares of UnitedHealth Group Inc.(UNH) fell more than 2%.
The S&P 500 index , trading with a 7-point range, fluctuated between slight gains and losses and was last up less than 1 point at 2,268, with the materials sector leading gainers and the energy sectorweighing on the index.
The Nasdaq Composite Index , trading within a 19-point range, rose 2 points to 5,540.
Retail shares have suffered in recent weeks following reports of tepid holiday sales. On Wednesday, Target Corp. (TGT) shares dropped 6% after the retailer warned that its fourth-quarter earnings (http://www.marketwatch.com/story/target-issues-profit-warning-on-weak-holiday-sales-2017-01-18) would be weaker than previously anticipated after a tough holiday season, sparking a selloff that spread throughout the sector. Dow component Wal-Mart Stores Inc.(WMT) fell in sympathy with Target, along with shares of Macy's Inc.(M), Dollar Tree Inc.(DLTR) and Dollar General Corp.(DG)
J.C. Penney Co. Inc.(JCP) and Kohls Corp.(KSS) shares sank after Credit Suisse downgraded both stocks.
"The story coming out of retail hasn't been good," said Mohannad Aama, managing director at Beam Capital Asset Management, adding that "individual stories" will likely continue to influence the broader sector.
But shares of the largest U.S. banks rallied after Goldman Sachs Group Inc. (GS) reported stronger-than-expected quarterly earnings, with shares of Morgan Stanley(MS) and Bank of America Corp.(BAC) trading higher. Shares of Goldman, however, eased back from their recent run and were last down 0.7%.
Financial stocks led a torrid postelection rally that took the Dow within a hair's breadth of the 20,000 milestone. But they've stalled over the past week as investors opted to wait for more details about President-elect Donald Trump's policies.
Meanwhile, Citigroup Inc. (C) reported quarterly revenues that were slightly weaker than expected, sending its shares 1.8% lower.
Mike Antonelli, an equity sales trader at R.W. Baird & Co., said global stocks would likely remain placid until investors have a better picture of the fourth-quarter earnings environment and companies' outlooks for2017, as well as Trump's plans.
The bulk of S&P 500 firms will release their earnings in the coming weeks.
"We're just coasting off of 2016 right now. With the lack of wind in our sails we've slowed down a bit," Antonelli said.
Healthy consumer-sentiment readings have helped constrain the stock-market rally, Antonelli said.
"It's hard for the market to go higher when everybody is already bullish," Antonelli said.
Transportation shares were constrained after railroad operator CSX Corp.(CSX)posted disappointing quarterly earnings (http://www.marketwatch.com/story/csx-corp-misses-q4-earnings-but-sales-come-in-above-expectations-2017-01-17). CSX shares fell 3.2% while the Dow Jones Transportation Average managed to hold onto a 0.1% gain.
U.S. stocks retreated Tuesday as the market turned its attention to (http://www.marketwatch.com/story/wall-street-stocks-set-for-a-lower-open-with-investors-rattled-by-trump-brexit-2017-01-17) comments from President-elect Donald Trump, who said a strong dollar is harming the U.S. economy. The Dow finished 0.3% lower at 19,826.77, the S&P 500 fell 0.3% to 2,267.89 and the Nasdaq lost 0.6% to 5,538.73.
Trump also criticized the North Atlantic Treaty Organization and warned that the U.S.'s one-China policy, a diplomatic protocol that has been in place since the 1970s, could be up for negotiation.
The Trump comments took a toll on the greenback, which was recovering some ground Wednesday (http://www.marketwatch.com/story/bargain-hunters-push-the-dollar-higher-after-trump-inspired-rout-2017-01-18). The U.S. Dollar index rose 0.6% to 100.94. The index fell 0.9% Tuesday.
Read:Trump is waving adios to the longstanding 'strong-dollar policy' (http://www.marketwatch.com/story/trump-is-waving-adios-to-the-longstanding-strong-dollar-policy-2017-01-17)
Economic docket: The consumer-price index, a widely watched gauge of inflationary pressure, showed price growth accelerated in 2016 at the fastest pace since 2011 (http://www.marketwatch.com/story/inflation-climbs-in-2016-at-fastest-pace-in-5-years-cpi-shows-2017-01-18).
In December, the index rose 0.3%. Excluding the volatile food and energy categories, prices rose 0.2%. The reading was in line with investor expectations and had little impact on stock futures.
U.S. industrial output accelerated last month at its strongest pace in two years.
The housing market index from the National Association of Homebuilders showed that builder sentiment slipped in January after notching its highest reading of the business cycle in December (http://www.marketwatch.com/story/home-builder-sentiment-slips-in-january-as-election-elation-eases-up-nahb-says-2017-01-18). Despite the drop, the January number was the second-highest reading of the cycle.
Inflation appears to be heating up, according to the Federal Reserve's so-called BeigeBook, (http://www.marketwatch.com/story/feds-beige-book-price-pressures-intensified-at-end-of-last-year-2017-01-18) which found that eight out of 12 Fed districts saw modest price increases. Underscoring retail woes, the report said that retailers struggled to raise prices.
Investors will also be watching a speech from Fed Chairwoman Janet Yellen on the goals of monetary policy, due at 3 p.m. Eastern Time.
Read: How long postelection rallies last after Inauguration Day--in one chart (http://www.marketwatch.com/story/how-long-post-election-rallies-last-after-inauguration-day-in-one-sp-chart-2017-01-13)
Stocks to watch:Netflix Inc. (NFLX)will report after the close. Shares were down 0.8% at last check.
Read: What to expect from Netflix earnings (http://www.marketwatch.com/story/netflix-earnings-what-to-expect-from-the-streaming-giant-2017-01-12)
Shares of Cameco Corp.(CCO.T) fell 19% after the uranium miner said it would cut 10% ofits workforce and warned on earnings (http://www.marketwatch.com/story/cameco-shares-drop-on-profit-warning-layoffs-2017-01-17) due to a continued weak market.
Apollo Global Management LLC(APO) is prepping Chuck E. Cheese for an initial public offering (http://www.marketwatch.com/story/chuck-e-cheese-prepped-for-ipo-report-2017-01-17) that values the restaurant chain at more than $1 billion, Reuters reported. Apollo shares were up 0.6%.
Qualcomm Inc.(QCOM) shares rebounded 1.2% Wednesday after the Federal Trade Commission filed a monopoly complaint against the chip maker, spurring a 4% drop on Tuesday. See: Qualcomm licensing business, Apple deal attacked in FTC's antitrust lawsuit (http://www.marketwatch.com/story/qualcomm-licensing-business-apple-deal-attacked-in-ftcs-antitrust-lawsuit-2017-01-17)
Other markets: European markets traded mixed. The FTSE 100 index was modestly higher, after logging its worst loss in six months on Tuesday after Prime Minister Theresa May confirmed the U.K. will exit the European Union's single market.
The British pound moved lower against the dollar, trading at $1.2277 from $1.2414 late Tuesday.
See: 'Textbook short squeeze' for the pound--analysts assess May's Brexit plans (http://www.marketwatch.com/story/textbook-short-squeeze-for-the-pound-analysts-assess-mays-brexit-plans-2017-01-17)
Asian stocks finished mostly higher (http://www.marketwatch.com/story/asian-stocks-mixed-as-investors-warily-await-trump-2017-01-17), with the Nikkei 225 index rising 0.4%, lifted by a stronger Japanese yen.
Oil prices (http://www.marketwatch.com/story/oil-prices-edge-up-on-production-cut-optimism-2017-01-18) lost a grip on earlier gains and fell 2.4%, while gold (http://www.marketwatch.com/story/gold-eases-a-touch-from-2-month-high-as-dollar-steadies-2017-01-18) settled down less than 0.1% at $1,212.10 an ounce after settling at a two-month high Tuesday on Trump and Brexit jitters.
--Barbara Kollmeyer in Madrid contributed to this report
(END) Dow Jones Newswires
January 18, 2017 15:01 ET (20:01 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.