Energy groups lead Wall Street lower

US equity markets finished the first day of the week marginally lower after trading in a narrow three-point band as traders awaited news from the upcoming G20 meeting as well as more earnings and economic data.

Investors locked in profits after major indices recorded six consecutive weeks of gains and reached new multiyear highs.

E. William Stone, chief investment strategist at PNC Asset Management Group, attributed strong year-to-date performance of equity markets to reduced headline and macro risks, better than expected corporate earnings and early signs that economic growth is improving early in 2013.

However, he cautioned that these improvements were fragile: “More work out of US and European policy makers is needed to maintain positive momentum.”

Given that the sequestration – automatic spending cuts of about $85bn in the fiscal 2013 year – is only two weeks away, it seems that markets have not fully priced in the possibility.

The S&P 500 index closed 0.1 per cent lower at 1,517.01 but has gained more than 6 per cent since the beginning of the year and was still hovering near its five-year highs reached last week. On Monday, seven of 10 major sectors finished in negative territory with losses led by energy stocks.

Oil and gas exploration companies were hardest hit with Noble Energy shares falling 2.3 per cent to $112.75 and WPX Energy shares down 2.3 per cent to $15.27. Southwestern Energy lost 2.6 per cent to $33.59.

The Dow Jones Industrial Average was trading 0.2 per cent lower at 13,967.55, having failed to move beyond the 14,000 level during the past few weeks.

Moody’s shares rose 4.9 per cent to $45.49, after heavy losses last week. Shares lost more than 20 per cent amid news reports of a possible investigation by the Department of Justice over alleged fraud in mortgage-backed securities ratings.

McGraw-Hill , which owns the Standard & Poor’s rating agency, also rose, adding 3.8 per cent to $44.28.

Nike shares attracted buyers after JPMorgan upgraded the stock. But initial excitement fizzled out and shares were 1.2 per cent higher at $55.22.

BlackBerry shares dropped sharply and closed 4.6 per cent lower at $15.73. Shares in the BlackBerry maker have been volatile after the launch of its new Z10 and Q10 smartphones, as investors are still not sure whether the company will recover its market share and be able to compete with Apple and android devices.

Banking stocks attracted buyers and sent the S&P 500 financials index 0.4 per cent higher.

Wells Fargo shares rose 1.1 per cent to $35.26 after analysts at Stifel Nicolaus upgraded the stock to “buy”.

Citigroup and Bank of America shares also rose, adding 1.1 per cent to $43.15 and 0.9 per cent to $11.86 respectively.

The technology-heavy Nasdaq Composite was lagging behind the broader market but has still gained 5.5 per cent since beginning of January. The index was trading 0.2 per cent lower at 3,187.93

Nasdaq’s biggest component Apple continued its upward march from last week, rising 1 per cent to $479.93.

The shares jumped last week after the iPhone and iPad maker announced it would distribute more of its cash to shareholders, in response to a lawsuit by David Einhorn’s hedge fund Greenlight Capital over corporate charter which would prohibit the company from issuing a new high-yielding class of shares.

Amazon shares were hit on Monday, dropping 1.8 per cent to $257.21.