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Stocks pull back after 4 weeks of gains; Yahoo slips

Traders Fred DeMarco, left, and Greggory Rowe work

Traders Fred DeMarco, left, and Greggory Rowe work on the floor of the New York Stock Exchange, Friday, June 24, 2016. Photo Credit: AP / Richard Drew

Stocks fell moderately on Monday as investors took a break after four weeks of gains that brought the market to record highs.

Energy companies fell more than the rest of the market as the price of oil took another turn lower. Yahoo fell after Verizon Communications announced it would buy most of Yahoo’s internet businesses for $4.83 billion.

The Dow Jones industrial average lost 77.79 points, or 0.4 percent, to 18,493.06. The Standard & Poor’s 500 index lost 6.55 points, or 0.3 percent, to 2,168.48 and the Nasdaq composite lost 2.53 points, or 0.1 percent, to 5,097.63.

It’s common for a market that has run up quickly to retreat. With the slow summer trading season and lack of economic news, traders say there are few reasons to be buying the market right now.

“This is a broad, but benign, sell-off,” said Ryan Larson, head of U.S. equity trading for RBC Global Asset Management.

Larson pointed out the recent price-to-earnings ratio on the S&P 500, or the amount money that investors are paying for each dollar of earnings, which was trading at nearly 20. That’s far above the 14-16 times that investors are typically comfortable with.

“It’s another reason why the market looks fatigued at the moment,” he said.

The 2 percent drop in oil prices dragged down major energy companies. Chevron lost $2.59, or 2.5 percent, to $103.07 and Exxon Mobil gave up $1.81, or 2 percent, to $92.20, the two biggest drops in the Dow Jones industrial average.

In other energy trading, wholesale gasoline fell 3 cents to $1.33 a gallon, heating oil fell 3 cents to $1.32 a gallon and natural gas also fell 3 cents to close at 2.75 per 1,000 cubic feet.

U.S. government bond prices didn’t move much. The yield on the 10-year Treasury note held steady at 1.57 percent. The dollar fell to 105.85 yen from 106.17 yen. The euro rose to $1.0989 from $1.0961.

The price of gold fell $3.90 to $1,319.50 an ounce, silver fell 4 cents to $19.65 an ounce and copper fell 2 cents to $2.22 a pound.

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