Wall St. recedes from record levels in broad decline

U.S. stocks edged lower on Tuesday, with major indexes pulling back from record levels as the recent trend of modest moves and low volume continued in the next-to-last trading day of the year.

The day's losses were broad if not especially deep. All ten primary S&P 500 sectors were lower on the day, with utilities .SPLRCU - 2014's best sector performer - leading the 

decline with a drop of 0.9 percent, followed by telecom .SPLRCL, which fell 0.4 percent. Both sectors are considered defensive groups.

Equities have been trending to the upside recently, buoyed by strong economic data and the U.S. Federal Reserve's commitment to be "patient" about raising interest rates. After the S&P 500 gained nearly 6 percent over the prior eight sessions, it notched its 53rd record close of the year on Monday, while the Dow just missed extending its streak of positive sessions to eight.

The speed and scale of the rally could push traders to take profits, and volatility could be amplified with many market participants out for the holiday, which depresses volume. The stock market will be closed on Thursday for the New Year's holiday.

"I still like equities, but we’re at a point where valuations are no longer really cheap. I don’t see much that looks inexpensive," said James Liu, global market strategist for JPMorgan Funds in Chicago.

Liu said that investors would typically buy defensive sectors in an environment like the current one, "but those are actually the most expensive. The standard playbook has been turned on its head." He added that he preferred cyclical sectors in 2015.

In the latest economic data, consumer confidence rose slightly less than expected in December, while U.S. single-family home price appreciation slowed less than forecast in October.

NeuroDerm Ltd (NDRM.O) soared 60 percent to $9.88 on heavy volume after it said data from a mid-stage study suggested that a higher dose of its Parkinson's drug could provide an alternative to treatments that require surgery.

Civeo Corp (CVEO.N), which provides temporary housing for oilfield workers and miners, said late Monday it slashed its workforce and forecast revenue could fall by one-third as slumping crude prices force oil producers to cut costs. The stock plunged 51 percent to $4.07 on volume of about 27.4 million shares, making for the most active day in its history.

At 11:00 a.m. the Dow Jones industrial average .DJI fell 48.06 points, or 0.27 percent, to 17,990.17, the S&P 500 .SPX lost 5.28 points, or 0.25 percent, to 2,085.29 and the Nasdaq Composite .IXIC dropped 14.25 points, or 0.3 percent, to 4,792.67.

Declining issues outnumbered advancing ones on the NYSE by 1,677 to 1,235, for a 1.36-to-1 ratio; on the Nasdaq, 1,451 issues fell and 1,090 advanced for a 1.33-to-1 ratio .

The S&P 500 was posting 19 new 52-week highs and 5 new lows; the Nasdaq Composite was recording 69 new highs and 29 new lows.

Reuters