Wall Street drifts lower as financial, tech stocks drag

By Tanya Agrawal

REUTERS - Wall Street was lower in early afternoon trading on Monday as a drop in technology and financial stocks offset a jump in energy shares.

Both the Dow and the S&P hit intraday record highs earlier in the session.

Oil prices gained as much as 6.5 percent to an 18-month high after OPEC and some of its rivals reached their first deal since 2001 to jointly reduce output to try to tackle global oversupply and boost prices. [O/R]

The S&P energy index was the top performing sector with a 1.4 percent rise. Oil major Exxon was up 2.79 percent, and was among the stocks boosting the Dow and the S&P. Chevron rose 1.9 percent.

President-elect Donald Trump's expected agenda of economic stimulus and reduced taxes and regulations has fueled a market rally, with the benchmark S&P 500 rising 5.6 percent since Nov. 8 to Friday's close.

The Dow has closed at record highs 14 times since the election and is about 1 percent away from hitting the 20,000 mark.

"The market has been rising on the incoming administration's proposals, but how many of those actually pass through Congress remains to be seen," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

"Investors are expecting the Fed to hike rates but are more interested in the tone of the statement."

Market participants are keeping a close watch on the U.S. Federal Reserve's last meeting for the year, beginning Tuesday, with a statement from Fed Chair Janet Yellen on Wednesday.

At 12:40 p.m. ET (1740 GMT) the Dow Jones industrial average was up 25.51 points, or 0.13 percent, at 19,782.36, the S&P 500 was down 4.15 points, or 0.183667 percent, at 2,255.38 and the Nasdaq Composite was down 41.39 points, or 0.76 percent, at 5,403.11.

Apple's 0.85 percent fall weighed the most on the Nasdaq and the S&P.

Six of the 11 major S&P sectors were lower, with the financial sector leading the decliners with a 1.18 percent drop. Wells Fargo was down 2.19 percent, while Bank of America and Goldman Sachs fell about 2 percent.

The industrials sector was down 0.73 percent, dragged down by defense stocks.

Lockheed Martin declined 4.4 percent to $248.10 after Donald Trump tweeted that the company's F-35 program and costs were "out of control". Other defense stocks, such as General Dynamics, Raytheon, and Northrop Grumman, were down between 2.2-4.4 percent.

Viacom fell as much as 8.8 percent to a two-month low of $35.24. Sumner Redstone's National Amusements withdrew its merger proposal for CBS and Viacom.

Declining issues outnumbered advancers on the NYSE by 1,911 to 1,003. On the Nasdaq, 1,921 issues fell and 847 advanced.

The S&P 500 index showed 64 new 52-week highs and one new low, while the Nasdaq recorded 197 new highs and 20 new lows.

(Reporting by Tanya Agrawal; Editing by Sriraj Kalluvila)