Wall Street opens flat as tech stocks slip

By Tanya Agrawal

REUTERS - U.S. stocks opened little changed on Thursday, with the Dow barely above 22,000, a milestone it breached a day earlier on the back of Apple's strong quarterly results.

However, a rally in tech stocks stalled following recent strong gains that have made the sector the strongest performer in 2017. The S&P tech index is up 23 percent this year.

Apple, Alphabet, Facebook and Amazon were all lower in early trading.

The Dow has risen 11.4 percent and the S&P is up 10.6 percent in 2017, helped by a strong earnings season, even as Wall Street loses confidence that President Donald Trump will be able to legislate his pro-growth agenda this year.

"Equities continue to trend higher, largely on the heels of favorable second-quarter earnings releases," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.

"At present, equities are in an earnings-driven market and earnings are surprising to the upside, providing valuation support for stocks at or near all-time highs."

The S&P 500 is trading at around 18 times earnings estimates for the next 12 months, well above its long-term average of 15 times.

At the same time, earnings of S&P 500 companies are now expected to have climbed 11.4 percent in the second quarter, up from an 8 percent rise estimated at the start of the month, according to Thomson Reuters I/B/E/S.

At 9:38 a.m. ET (1338 GMT), the Dow Jones Industrial Average was down 10.97 points, or 0.05 percent, at 22,005.27, the S&P 500 was down 3.68 points, or 0.14 percent, at 2,473.89.

The Nasdaq Composite was down 4.12 points, or 0.06 percent, at 6,358.53.

Ten of the 11 major S&P sectors were lower, with the real estate index's 0.44 percent fall leading the decliners.

Investors are also keeping an eye on the economic data for clues on the health of the economy ahead of the keenly awaited monthly payrolls data on Friday.

The Labor Department data showed weekly jobless claims fell last week pointing to a tightening labor market. Initial claims for state unemployment benefits fell to 240,000, below the 242,000 claims expected by economists.

Shares of Tesla jumped 7.20 percent after the luxury electric car maker said its quarterly revenue more than doubled.

Aetna rose 3.59 percent and Regeneron 1.52 percent after the healthcare companies posted strong quarterly reports.

U.S.-listed shares of Israeli drugs company Teva slumped 16.80 percent after it reported a steeper-than-expected drop in second-quarter earnings and cut its interim dividend.

Yum Brands fell 1.17 percent after the owner of KFC and Taco Bell reported a lower-than expected rise in quarterly sales at established restaurants worldwide.

Advancing issues outnumbered decliners on the NYSE by 1,248 to 1,195. On the Nasdaq, 1,113 issues rose and 1,069 fell.

(Reporting by Tanya Agrawal in Bengaluru; Editing by Anil D'Silva)