Wall Street rally loses steam after record run

(Reuters) – U.S. stocks retreated from record highs on Wednesday, halting a rally that has been fueled by signs of progress in trade talks between Washington and Beijing and a largely upbeat corporate earnings season.

Losses in shares of Microsoft Corp (MSFT.O) and Facebook Inc (FB.O) weighed the most on the benchmark index and the Nasdaq.

The S&P 500 energy sector .SPNY fell 0.39% and was the biggest decliner as oil prices fell due to a build up in U.S. crude stocks and weak euro zone economic figures.

“There is no game changing catalyst on the agenda today that we could see moving these markets distinctively higher,” said Art Hogan, chief market strategist at National Securities in New York.

Investor focus remained on further signs of progress on U.S.-China trade relations, with latest reports saying the two sides were still working out the details of a “phase one” deal, which could be signed later this month.

Market players are also closely tracking data to assess the fallout of the trade war on the domestic economy. A fresh crop of indicators this week has been mixed, with the ISM services index showing a better-than-expected reading, but nonfarm productivity falling.

The third-quarter earnings season continues to impress, with the bulk of S&P 500 companies besting analysts’ profit expectations.

To some extent, however, those figures reflect significantly lowered expectations of analysts who had forecast the first earnings drop since late 2016, while doubts still linger about the market’s ability to rally much further this year.

At 10:12 a.m. ET the Dow Jones Industrial Average .DJI was up 4.07 points, or 0.01%, at 27,496.70, and the S&P 500 .SPX was up 1.08 points, or 0.04%, at 3,075.70. But the Nasdaq Composite .IXIC was down 17.97 points, or 0.21%, at 8,416.71.

Humana Inc (HUM.N) rose 2.4% as the health insurer reported quarterly profit that beat estimates on higher sales of its government-backed Medicare Advantage health plans.

CVS Health Corp (CVS.N) gained 4.8% after the pharmacy chain posted a better-than-expected quarterly profit, boosted by its Aetna health insurance business and pharmacy benefit management unit.

But shares of Capri Holdings Ltd (CPRI.N) dropped 1.4% after missing profit estimates, as protests in Hong Kong and negative Chinese consumer reaction to an “incorrectly labeled” T-shirt hurt sales of its Versace brand.

Match Group Inc (MTCH.O) slumped 6.5% as the Tinder-owner forecast fourth-quarter revenue below estimates in the face of stiff competition from rival online dating services. Its parent firm, IAC/InterActiveCorp (IAC.O), dropped 5.8%.

HP Inc (HPQ.N) jumped 9.4% after a report that Xerox Holdings Corp (XRX.N) was considering an offer for the personal computer maker at a premium to its market value of about $27 billion. Xerox shares were down 2.5%.

Advancing issues outnumbered decliners by a 1.06-to-1 ratio on the NYSE and for a 1.43-to-1 ratio on the Nasdaq.

The S&P index recorded nine new 52-week highs and one new low, while the Nasdaq recorded 42 new highs and 29 new lows.