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Wall Street: Stocks slip from record levels in midday trading

U.S. stocks declined from records in early afternoon trading Monday as oil dropped below $50 a barrel. The dollar strengthened against emerging-market currencies before Federal Reserve Chair Janet Yellen addresses Congress this week.

The Standard & Poor’s 500 Index slid 0.3 percent at 12:47 p.m. in New York after closing at an all-time high on Friday.

Major U.S. equity benchmarks closed at records Friday after Greece reached a deal to extend the terms of its bailout. Investors will watch Yellen’s semi-annual testimony to Congress starting Tuesday for clues on the timing of an interest-rate increase. A report Monday showed sales of existing U.S. homes fell more than forecast last month.

“We’ve had a big February rally and the market’s somewhat overbought,” Bruce Bittles, chief investment strategist at Milwaukee-based RW Baird & Co., which oversees $110 billion, said in a telephone interview. “Janet Yellen meets with Congress this week and there’ll be some Fed-watchers looking for direction.”

Seven of the 10 main S&P 500 groups retreated Monday, with energy and financial shares losing at least 0.6 percent to pace declines. Health-care shares advanced 0.5 percent. Valeant Pharmaceuticals International Inc. climbed 13 percent to the highest ever after saying it will purchase Salix Pharmaceuticals Ltd. for $10.1 billion.

U.S. stocks posted their longest streak of weekly gains since the beginning of December as Greece reached a deal to extend its bailout program and investors speculated the Fed will keep rates lower for longer even as the economy shows signs of picking up speed.

The Nasdaq Composite Index ended last week on an eight-day winning streak that took the gauge to 4,955.97, less than 2 percent away from a record. The S&P 500 climbed 0.6 percent last week and the Dow rose to its first record of the year.

Sales of previously owned U.S. homes fell more than expected in January as a tight supply forced up prices, showing the residential real-estate market faces an uneven recovery. Purchases slowed 4.9 percent to a 4.82 million annualized rate, the least since April, according to figures from the National Association of Realtors.

Strife over Greece’s debt was among risks to the U.S. economy cited by Fed officials as an argument for keeping rates low for longer, according to minutes from the group’s latest meeting released on Feb. 18. Policy makers said after the gathering that they “can be patient” as they consider when to raise borrowing costs, even as they described the labor market as “strong.”

The Greek reform measures are still subject to validation by the International Monetary Fund, the European Central Bank and the European Commission, the institutions collectively known as the troika which Prime Minister Alexis Tsipras vowed not to recognize.

“Markets have reacted positively in terms of risk sentiment and we’re seeing the periphery doing very well” because of the Greek deal, said Owen Callan, a fixed-income strategist at Cantor Fitzgerald LP in Dublin. “It takes away the big short-term event risk, even if a medium-term risk is still there.”