Dow, S&P 500 drop as U.S. bank rally wanes

NEW YORK - The S&P 500 closed lower and the Dow ended a seven-day rally on Wednesday as financial stocks fell but gains in technology stocks helped Nasdaq end the day higher.

U.S. stocks had been on a tear since the real estate developer's surprise victory in the Nov. 8 presidential election. The Dow had closed higher for the previous seven sessions, with the last four at record levels.

The S&P financial sector ended its own seven-day rally with a 1.4 percent decline. Both the Dow and S&P pared losses in choppy afternoon trading.

'I think you've a lot of people who were caught sleeping last week and are trying to use the weakness to put their money to work,” said Paul Hickey, co-founder of Bespoke Investment Group, a research firm in Harrison, N.Y.

'People with money on the sidelines are looking for a place to put it. They're looking for names that haven't rallied as much and ones that have rallied are taking a bit of a breather.”

The Dow Jones industrial average closed down 54.92 points, or 0.29 percent, to 18,868.14, the S&P 500 lost 3.45 points, or 0.16 percent, to 2,176.94 and the Nasdaq Composite added 18.96 points, or 0.36 percent, to 5,294.58.

Investors were still looking for clarity on how much of Trump's campaign promises will become a reality, while preparing for higher interest rates and inflation.

Trump's proposals to cut taxes and raise infrastructure spending are seen boosting economic activity and inflation, while any dismantling of foreign trade agreements or imposition of import tariffs would be expected to hurt the U.S. economy.