Wall St. weighed by Apple but banks shine on
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A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri/File Photo
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By Rodrigo Campos
NEW YORK (Reuters) - Apple Inc was the largest weight on U.S. stock indexes on Tuesday after antitrust regulators ordered the company to pay about $14.5 billion in back taxes to the Irish government, but gains in bank shares partly offset the decline.
The S&P 500 fell for the fourth time in five sessions, but was still within 1 percent of its record closing high set earlier this month. Cyclical sectors, which are expected to perform better in an expanding economy, have taken the lead in the past few weeks as economic data paints a rosier picture of the U.S. economy.
U.S. consumer confidence rose to an 11-month high in August, with households more upbeat about the labor market. Payrolls data on Friday could strengthen the case for higher U.S. interest rates, as has been hinted over the past week by Federal Reserve officials.
Bets on a bottoming out of bond yields have given support to bank stocks of late. The S&P 500 financial sector <.SPSY> is up 1.8 percent so far this week, compared with a 0.3 percent advance for the S&P.
"The economy is doing well, the labor market is still doing well, there's reasons to think (interest) rates have bottomed and that is good for financials," said Paul Zemsky, chief investment officer, Multi-Asset Strategies and Solutions at Voya Investment Management in New York.
S&P 500 financials closed at their highest level since early December, right before the Fed raised interest rates for the first time in nearly 10 years.
Cyclical sectors should continue to lead the stock market despite Tuesday's declines in all sectors outside financials, Zemsky said.
"A day is not a way to look at the trend," he said.
But Apple (NASDAQ: AAPL) weighed on major indexes after the European Commision ordered the iPhone maker to pay Ireland up to 13 billion euros ($14.5 billion) in unpaid taxes, as it ruled the firm had received illegal state aid.
The Dow Jones industrial average <.DJI> fell 48.69 points, or 0.26 percent, to 18,454.3, the S&P 500 <.SPX> lost 4.26 points, or 0.2 percent, to 2,176.12 and the Nasdaq Composite <.IXIC> dropped 9.34 points, or 0.18 percent, to 5,222.99.
United Continental Holdings (NYSE: UAL) rallied 8.6 percent to close at $50.99 after it hired the No. 2 executive at rival American Airlines (NASDAQ: AAL) as United's board and chief executive officer seek to shape a new strategy and boost the airline's stock price. American shares rose 2.4 percent to $37.05.
Abercrombie & Fitch (NYSE: ANF) plunged 20.3 percent to $18.29 after the teen apparel retailer posted its 14th straight quarter of declining sales and said it no longer expects comparable sales to improve this year.
Declining issues outnumbered advancing ones on the NYSE by a 1.04-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favored advancers.
The S&P 500 posted 26 new 52-week highs and no new lows; the Nasdaq Composite recorded 121 new highs and 20 new lows.
About 5.66 billion shares changed hands on U.S. exchanges, compared with the 5.98 billion daily average over the last 20 sessions. The 20-day average dipped below 6 billion shares for the first time since June 2015.
(Reporting by Rodrigo Campos; Editing by Dan Grebler)
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