US stocks retreated after disappointing home sales data

U.S. stocks fell, reducing a monthly gain for the Standard & Poor’s 500 Index, as fewer Americans signed contracts in June to buy previously owned homes.

The S&P 500 fell 0.4% to 1,685.33 at 4 p.m. in New York. The benchmark index slumped less than 0.1% last week, halting its longest streak of weekly gains since May 17. The Dow Jones Industrial Average dropped 36.86 points, or 0.2 percent, to 15,521.97 today.

“Some of the economic data appears softer than we anticipated,” Eric Teal, who helps oversee $5 billion as chief investment officer at First Citizens BancShares Inc., said to Bloomberg via phone from Raleigh. “Some pause might be in order over the next few months after the strong gains the first half of the year.” he added.

The S&P 500 has added 4.9% this month. The benchmark index surged 149% since March 2009, boosted by better-than-estimated corporate earnings and three rounds of bond purchases by the U.S. central bank. The gauge fell in June, after seven consecutive months of gains, as investors examined economic data to assess when the Federal Reserve will reduce its $85 billion of monthly bond purchases.

House contracts to buy previously owned homes in June decreased, showing rising mortgage rates are beginning to restrain the housing market. The index of pending home sales dropped 0.4%, less than forecast, to 110.9 in June after climbing a month earlier to the highest level since December 2006, figures from the National Association of Realtors showed today in Washington. The median forecast in a Bloomberg survey of 40 economists called for a 1% decline.

Energy and financial stocks retreated by 0.8% each. Exxon Mobil Corp. fell 0.8% to $94.03 and Chevron Corp. slumped 1.1% to $126.17. Bank of America Corp. lost 1.4% to $14.52 for the biggest decline in the Dow while JP Morgan Chase & Co. declined 0.6% to $55.69.

Facebook gained 4.2% to $35.43, the highest price since the month of its initial public offering. The world’s largest social network last week reported that ads on smartphones and tablets generated 41% of revenue in the second quarter, up from 14% a year earlier.

Pfizer Inc. added 0.6% to $29.54. The world’s biggest drug-maker said it will split its three major internal businesses and shuffle the management that leads them.

Synta Pharmaceuticals Corp. jumped 41% to $7.15 for the biggest gain in more than four years. A small trial of its drug in breast cancer met goals warranting expansion of the study.