U.S. Stocks Fall 03/04 15:36
U.S. stocks sank Wednesday, pulling indexes further below record highs hit
earlier in the week. The drop was modest but broad: nine of the 10 sectors in
the Standard & Poor's 500 index lost ground.
NEW YORK (AP) -- U.S. stocks sank Wednesday, pulling indexes further below
record highs hit earlier in the week. The drop was modest but broad: nine of
the 10 sectors in the Standard & Poor's 500 index lost ground.
Given the market's recent run, it's only natural for investors to turn
cautious, said Terry Sandven, senior equity strategist at U.S. Bank Wealth
Management. On Monday, the S&P 500 reached an all-time high while the Nasdaq
crossed the 5,000 mark for the first time in nearly 15 years.
"We're in wait-and-see mode," Sandven said. "Prices are definitely
stretched, especially when earnings expectations are being set lower."
The S&P 500 gave up 9.25 points, or 0.4 percent, to 2,098.53.
The Dow Jones industrial average lost 106.47 points, or 0.6 percent, to
18,096.90. The Nasdaq composite fell 12.76 points, or 0.3 percent, to 4,967.14.
Alcoa's stock sank 4 percent following news that analysts at Bank of America
cut their ratings on the aluminum giant. BofA's analysts expect prices for
aluminum to lose strength as China increases its exports. Alcoa lost 59 cents
Abercrombie & Fitch posted quarterly profits that beat analysts' estimates
but its sales fell short. A top executive at the retailer warned that it will
likely face trouble from a stronger dollar. Abercrombie's stock plunged $3.72,
or 16 percent, to $20.27.
With all but 12 big companies in the S&P 500 having turned in their
fourth-quarter results, overall earnings are on track to increase 7.7 percent,
according to S&P Capital IQ. That's much better than some had feared.
Forecasts for the first three months, however, have been slashed. In early
December, analysts projected an 8.6 percent increase in corporate earnings for
the first quarter. Today, they expect them to shrink 2.6 percent.
ADP, a payroll processing company, reported Wednesday that its survey showed
U.S. businesses added more than 200,000 people to their payrolls in February,
the latest sign of strong hiring. The survey came two days before the
government's release of its monthly employment report on Friday. Economists
forecast that the economy added 240,000 jobs last month and the unemployment
rate slipped to 5.6 percent from 5.7 percent.
U.S. economic growth appears steady despite reports out earlier this week
showing declines in construction spending and car sales, according to Jim
O'Sullivan, chief U.S. economist at High-Frequency Economics. "We expect
another fairly strong rise in payrolls and a drop in the unemployment rate in
the February employment report on Friday," O'Sullivan said in a report to
In Europe, both France's CAC-40 index and Germany's DAX gained 1 percent.
Britain's FTSE 100 picked up 0.4 percent.
Two reports showed hints of life in Europe's economy. Retail sales increased
by 1.1 percent in January, the first time since records began in 2000 that
they've grown for four consecutive months. Meanwhile, a key gauge of business
activity showed growth in February across all four of the region's biggest
economies: Germany, France, Italy and Spain.
In the market for U.S. government bonds, the yield on the 10-year Treasury
note held steady at 2.12 percent.
Most precious and industrial metals traded lower. Gold fell $3.50 to settle
at $1,200.90 an ounce, and silver slipped 14 cents to $16.16 an ounce. Copper
settled at $2.66 a pound, nearly unchanged.
Benchmark U.S. crude rose $1.01 to settle at $51.53 a barrel in New York.
Brent crude, the international benchmark, fell 47 cents to $60.55 in London.
In other trading on the New York Mercantile Exchange:
--- Wholesale gasoline fell 2.4 cents to close at $1.926 a gallon.
--- Heating oil fell 3.9 cents to close at $1.901 a gallon.
--- Natural gas rose 5.7 cents to close at $2.769 per 1,000 cubic feet.