Wall Street falls on weak data in retreat from rally
By Ryan Vlastelica | February 22, 2013 4:21 AM EST
U.S. stocks fell on Thursday, on track for the biggest two-day decline since November, as weak data suggested expectations for economic growth were overly optimistic.
The two-day decline was stocks' first sustained pullback this year. The S&P 500 is up 5.4 percent so far this year and risen for seven straight weeks, putting it near five-year highs.
In the latest economic data, initial claims for unemployment benefits rose more than expected last week while the Federal Reserve Bank of Philadelphia said its index of business conditions in the U.S. mid-Atlantic region fell in February to minus 12.5, the lowest in eight months.
"The Philly Fed report was troublingly weak, and adds to concerns about whether growth will remain up," said Brad Sorensen, director of market and sector analysis at Charles Schwab in Denver. "The only growth we're seeing is sluggish."
The S&P 500 and Nasdaq posted the worst daily decline of the year on Wednesday after comments from the Federal Reserve sparked concerns the central bank may rein in its economic stimulus measures.
"The upside momentum in markets appears to be coming to an end as we consolidate recent gains," said Adam Sarhan, chief executive at Sarhan Capital in New York. "If the S&P breaks under its 50-day moving average, something more serious could be in store."
The benchmark index would need to fall 1.9 percent to reach that level of 1,473.58.
Other reports showed consumer prices were flat in January while existing-home sales edged higher and left inventory of homes at the lowest level in 13 years.
Wal-Mart Stores Inc
The Dow Jones industrial average <.DJI> was down 53.07 points, or 0.38 percent, at 13,874.47. The Standard & Poor's 500 Index <.SPX> was down 8.26 points, or 0.55 percent, at 1,503.69. The Nasdaq Composite Index <.IXIC> was down 24.71 points, or 0.78 percent, at 3,139.70.
The benchmark S&P index has dropped 1.8 percent over the past two sessions, the biggest two-day decline since November.
Wall Street will soon face another test with the upcoming debate in Washington over the automatic, across-the-board spending cuts put in place as part of a larger congressional budget fight. Those cuts, due to kick in March 1 unless lawmakers agree on an alternative, are expected to depress economic growth.
In company news, Safeway Inc
VeriFone Systems Inc
According to Thomson Reuters data through Thursday morning, of the 427 companies in the S&P 500 that have reported results, 69.3 percent have exceeded analysts' expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters.
Fourth-quarter earnings for S&P 500 companies are estimated to have risen 5.9 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.
Berry Petroleum Co
(Editing by Kenneth Barry)
Most Popular Slideshows
- Angelina Jolie & Brad Pitt Heads to Malta For New Movie After A Whirlwind French Wedding [PHOTOS]
- Prince William & Kate Middleton Caught Flirting In A Countryside Dinner Date [PHOTOS]
- Chris Martin Getting Serious With Jennifer Lawrence, Actress Joining Coldplay Tour [PHOTOS]
- 2014 US Open Update (Day 4 - Men's Singles): Murray, Djokovic, Raonic and Isner Advance to 3rd Round [PHOTOS]
Join the Conversation
- Apple iPhone 6 Actual Release Date after September 9 Confirmed 128GB Variant with New Resolution
- Pricey iPhone 6 on Release Date Likely but with 3X Retina Resolution & Mobile Payment Service – Reports
- Google Nexus 8 Confirmed as HTC T1 aka Volantis/Flounder with Freshly-Leaked Specs & Features – Reports
- Moto G2 Release Roundup: Specs, Pricing, and Release Date Details
- PlayStation 4 Killing Xbox One Costing Microsoft Millions But It's Fine
- Nexus 6 on Release Date Confirmed with Phablet-Size Display as FCC Filing Hints of 5.9-Inch Screen
- Europe, US Next on ISIS’ Hit List, Says Saudi King; Seized ISIS Laptop Reveals Terrifying Bio-Warfare Plans