(Reuters) - Wall Street’s major indexes pared earlier losses on Wednesday as higher U.S. government bond yields drove gains for banks and other financial stocks.
Markets had initially fallen on a Bloomberg report that China, the world’s biggest holder of U.S. Treasuries, was considering slowing purchases.
The China report weakened the dollar, which slipped 0.25 percent, while gold jumped to its highest in four months.
“We’ve had a tremendous run, mostly unabated since Trump’s election in 2016 and with no volatility. If we do see a pullback, that’s going to be a buying opportunity,” said Michael Scanlon, managing director of Manulife Asset Management.
The S&P and the Nasdaq have closed at record highs every single day in 2018, buoyed by optimism over global growth and expectations of a strong quarterly earnings.
Earnings for S&P 500 companies are expected to increase by 11.8 percent, with biggest contribution from the energy sector, according to Thomson Reuters I/B/E/S.
“It will be the first time that Corporate America has the ability to talk about guidance that incorporates lower tax rates. It’s going to be confusing and noisy but will be fascinating,” said Art Hogan, chief market strategist at B. Riley FBR in Boston.
Eight of the 11 major S&P sectors were lower, led by a 1.75 percent fall in interest-rate sensitive real estate and 1.24 percent drop in utilities .SPLRCU.
The Dow Jones Transport index .DJT, often looked at as a gauge of the economy’s health, rose 0.45 percent after United Continental (UAL.N) reported higher traffic for December, boosting other airline stocks.
Declining issues outnumbered advancers on the NYSE by 1,786 to 1,077. On the Nasdaq, 1,624 issues fell and 1,264 advanced.
Reporting by Sruthi Shankar in Bengaluru; editing by Patrick Graham and Arun Koyyur