NEW YORK |
NEW YORK (Reuters) – Stocks fell on Wednesday as weaker-than-expected data on durable goods orders and a drop in oil prices prompted selling in energy and materials shares.
The SP energy sector index .GSPE was off 1.7 percent and the materials sector index .GSPM fell 1.8 percent. All 10 SP 500 sectors were down.
Caterpillar Inc (CAT.N) fell 3 percent to $104.78 and was the biggest loser in the Dow. Chevron Corp (CVX.N) lost 1.5 percent to $105.44.
U.S. crude oil futures fell 2.1 percent to about $105 a barrel after a French newspaper reported several governments, including the United States, were considering the release of oil reserves to ease high prices — seen as an obstacle to an economic recovery.
Investor anxiety has been rising due to the prolonged and significant rally, and we had a catalyst event in the collapse of energy stocks,” said Jim Paulsen, chief investment officer at Wells Capital Management.
“It’s a combination of investor jitters, given how far the rally has come, and technical levels that we are testing, seeing if the rally can hold up.”
He said holding the 1,400 level on the SP 500 was an indication the market’s uptrend was still in place.
The Dow Jones industrial average .DJI was down 81.35 points, or 0.62 percent, at 13,116.38. The Standard Poor’s 500 Index .SPX was down 10.78 points, or 0.76 percent, at 1,401.74. The Nasdaq Composite Index .IXIC was down 23.05 points, or 0.74 percent, at 3,097.30.
New orders for U.S. manufactured goods rose less than expected in February and a gauge of future business investment also missed forecasts, casting a shadow on the manufacturing sector’s support of the recovery.
“While today’s data fell a bit short, it was still OK. But the market has raised the bar on economic numbers, which is positive because we are starting to see improvement in the sentiment,” said Mike Shea, managing partner and trader at Direct Access Partners in New York.
Analysts see limited upside in the SP 500 after gains of more than 12 percent this year. The benchmark index is on track for its best quarter since the third quarter of 2009.
Large-cap shares, many already at 52-week highs, could continue to outperform as money managers dress up their portfolios ahead of the quarter-end on Friday.
Much of the market’s recent gains have come after accommodative monetary policies by central banks globally, including the U.S. Federal Reserve.
On Tuesday, Fed Chairman Ben Bernanke, asked in an ABC News interview about the potential for more quantitative easing, said the Fed wasn’t taking any options off the table.
Shares of Annie’s Inc (BNNY.N) surged 71.6 percent to $32.58 after the organic food maker’s initial public offering priced shares at $19, above its expected range.
Apple Inc (AAPL.O) will offer buyers of its new iPad in Australia a refund after it was accused of misleading advertising. Still, shares rose 0.9 percent to $615.21 after hitting another all-time high in early trading.
(Editing by Jeffrey Benkoe)