By Lewis Krauskopf
(Reuters) - The S&P 500 ended slightly higher on Wednesday as investors digested mixed earnings reports, while the Dow Jones Industrial Average slipped as bank stocks weighed.
The Nasdaq gained moderately to close at a record high for a second straight day, lifted by big tech names such as Facebook (O:FB) and Apple (O:AAPL).
Allergan (N:AGN) shares rose 3.7 percent after the drugmaker's fourth-quarter profit and revenue topped estimates. Gilead Sciences (O:GILD) shares tumbled 8.6 percent and were the biggest drag on the benchmark S&P after the biotech company's weak forecast for its hepatitis C medicines.
Major U.S. stock indexes are hovering around record highs after a rally following the Nov. 8 election of President Donald Trump amid expectations he will usher in fiscal stimulus and lower regulations and taxes.
But the rally has stagnated in recent days as investors await more details about Trump's potential economic policy agenda.
"Usually, this would be a period in which earnings and guidance drive the market," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
"But because it's the first three weeks or four weeks of a new president who is promoting radical change than what has been going on, Washington takes precedence, I think, over earnings in the eyes of investors these days."
The Dow Jones Industrial Average (DJI) fell 35.95 points, or 0.18 percent, to 20,054.34, the S&P 500 (SPX) gained 1.59 points, or 0.07 percent, to 2,294.67 and the Nasdaq Composite (IXIC) added 8.24 points, or 0.15 percent, to 5,682.45.
Financials, which have soared since the election, were the worst-performing S&P sector, falling 0.8 percent. Goldman Sachs (N:GS) fell 0.8 percent, making it the biggest drag on the Dow, and JP Morgan (N:JPM) dropped 0.9 percent.
Bank stocks are sensitive to interest rate changes, and U.S. Treasury yields fell to their lowest levels in weeks.
The real estate <.SPLRCR> and utilities (SPLRCU) sectors, which tend to perform well in low-rate environments, were the best performing groups.
"As the yield curve flattens, we’re back to a very tough environment for financials," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. "They live off the spread."
With about two-thirds of the S&P 500 having reported results, fourth-quarter earnings are on track to have climbed 8.3 percent, which would be the best performance since the third quarter of 2014, according to Thomson Reuters I/B/E/S.
In other corporate news, Nordstrom (N:JWN) shares rose 4.1 percent. Trump attacked the retailer on Twitter for dropping his daughter Ivanka's clothing line.
About 6.7 billion shares changed hands on U.S. exchanges, similar to the daily average over the last 20 sessions.
Advancing issues outnumbered declining ones on the NYSE by a 1.29-to-1 ratio; on Nasdaq, a 1.23-to-1 ratio favored decliners.
The S&P 500 posted 19 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 92 new highs and 51 new lows.