By Saumya Vaishampayan
U.S. stocks fell for the second session in a row, sending the
Dow industrials and S&P 500 to their lowest levels in nearly
two weeks.
The Dow Jones Industrial Average fell 106.47 points, or 0.6%, to
18096.90. The S&P 500 declined 9.25 points, or 0.4%, to
2098.53. For both indexes, it was the lowest close since Feb
19.
The Nasdaq Composite slipped 12.76 points, or 0.3%, to
4967.14.
Stocks drifted lower throughout the session, and traders said
there was no sense of panic among investors selling stocks.
Declines were broad-based, with nine out of 10 S&P 500 sectors
in negative territory.
"The markets have a tendency to...pull back modestly when record
high levels are hit," said Randy Frederick, managing director of
trading and derivatives at Charles Schwab. The Dow and S&P 500
closed at all-time highs Monday.
The six-year bull market in U.S. stocks has been driven by an
improving economy, rising corporate profits and low interest rates.
Federal Reserve officials are now debating when to raise short-term
rates, which have been held near zero since December 2008. The Fed
considers employment and inflation in making monetary policy
decisions. While the recovery in the labor market has been robust,
inflation remains below the Fed's 2% objective and is likely to
remain muted amid a slide in oil prices.
Chicago Fed Bank President Charles Evans said Wednesday the
central bank should refrain from raising rates until early 2016 as
inflation remains low.
Highly anticipated employment numbers are set to be released
Friday. The Labor Department is expected to report the U.S. economy
added 240,000 jobs in February, according to economists surveyed by
The Wall Street Journal. Strong economic data tend to heighten
speculation about when the Federal Reserve could raise short-term
rates.
"We want a number that's good but not too good" for stocks to
continue grinding higher, said Larry Peruzzi, director of
international trading at Cabrera Capital Markets, referring to
Friday's report.
Data released Wednesday showed business hiring remained modest
in February. U.S. private payrolls increased by 212,000 last month,
roughly in line with the 215,000 gain expected by economists.
Telecommunications stocks in the S&P 500 fell the most
Wednesday, down 1.2%, while health-care stocks were the sole
gainers, up 0.4%.
"Health care...has really been a sector for all seasons," said
Eric Wiegand, senior portfolio manager at U.S. Bank Wealth
Management, which has $126 billion under management. "The
underlying demand trends we find very attractive and favorable," he
said, referring to the aging population in many developed countries
that will lift demand for health-care services.
In European stock markets, France's CAC 40 and Germany's DAX
both advanced 1%. Investors are looking ahead to a Thursday meeting
of the European Central Bank, which could provide details on how it
will execute its bond-buying program. The euro hit an 11-year low
against the U.S. dollar, recently trading at $1.1076.
In other markets, gold futures fell 0.3% to $1200.60 an ounce.
Treasury prices were little changed, with the yield on the 10-year
note at 2.121%, compared with 2.122% on Tuesday. Yields fall as
prices rise.
Crude-oil futures rose 2% to $51.53 a barrel. Oil prices have
stabilized in recent weeks, though they have tumbled more than 50%
since June. The slide in oil prices since last summer has weighed
on shares of energy companies, which have been forced to slash
spending plans and dividends.
"Energy has been bludgeoned enough that it's time to take a good
hard look in the area," said Doug Foreman, chief investment officer
of Kayne Anderson Rudnick Investment Management, which oversees
$9.3 billion.
Exxon Mobil Corp. announced plans to cut its capital spending
budget by 12% this year to $34 billion. Shares inched down
0.5%.
In other corporate news, Abercrombie & Fitch Co. posted a
worse-than-expected 14% drop in sales in its latest quarter and
warned of tough months ahead. Shares slid 16%.
American Eagle Outfitters Inc. shares rose 7.7% after the teen
retailer reported its first quarter of revenue growth in two
years.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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