Wall St falls on first trading day of 2014; techs weigh

By Angela Moon

NEW YORK (Reuters) - U.S. stocks fell on their first day of trading in 2014 as investors booked profits in the wake of the S&P 500's best yearly advance since 1997.

Shares of Apple Inc fell 1.3 percent to $555.59, leading a decline in technology stocks, after Wells Fargo cut its rating on the iPad and iPhone maker to "market perform" from "outperform". Apple was the biggest drag on both the S&P 500 and Nasdaq 100 indexes.

The S&P technology index fell 1 percent, the biggest decliner among the 10 major S&P sectors. Among the stocks that fell the most Thursday were those that had enjoyed the best gains in 2013, including Netflix , which was down 1.6 percent at $362.45, and Micron Tech Inc , which was off 0.9 percent at $21.56.

 

Netflix was the biggest gainer of last year with a hefty return of 296.4 percent while Micron Tech skyrocketed 236 percent, according to data by Schaeffer's Investment Research.

Conversely, last year's biggest losers were among those that racked up the best gains on Thursday. Newmont Mining Corp was up 3.8 percent at $23.91 after losing 51 percent in value in 2013.

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The S&P 500 closed 2013 with a spectacular 29.6 percent gain for the year, its best annual performance since 1997, adding $3.75 trillion in market value. The Dow surged 26.5 percent in its best year since 1995. The Nasdaq jumped 38.3 percent, its best year since 2009.

"Though few market forecasters expect 2014 market performance to exceed 2013, historical patterns suggest that we could see performance similar to other bull markets that have lasted into the fifth year," said Randy Frederick, managing director of active trading and derivatives at the Schwab Center for Financial Research.

Global stock markets were mixed Thursday after weaker Chinese manufacturing data suggested the world's second-largest economy might be slowing.

An index of U.S. factory activity stood at 57.0 last month, in line with economists' forecast but a touch below November's 2-1/2-year high of 57.3.

Other data included weekly initial claims which slipped for a second week, to 339,000, suggesting labor market conditions continued to steadily improve. In another sign of economic improvement, financial data firm Markit said its final U.S. Manufacturing Purchasing Managers Index rose to 55.0 in December, beating November's 54.7 reading.

The Dow Jones industrial average fell 141.6 points or 0.85 percent, to 16,435.06, the S&P 500 lost 17.71 points or 0.96 percent, to 1,830.65 and the Nasdaq Composite dropped 38.688 points or 0.93 percent, to 4,137.902.

In a note to clients, Tobias Levkovich, chief U.S. equity strategist at Citigroup, boosted his year-end 2014 target for the S&P 500 to 1,975 from 1,900, citing earnings progress as the primary driver.

Trading volume Thursday is expected to remain light, with many market participants away during the holiday-abbreviated week. Markets were closed Wednesday for New Year's Day.

(Editing by Bernadette Baum and Nick Zieminski)