U.S. stocks declined, giving the Standard & Poor’s 500 Index a three day of decline, amid growing speculation the Federal Reserve will pare bond purchases this year as the economy strengthens.
The S&P 500 slid 0.4% to 1,690.91 at 4 p.m. in New York. The benchmark gauge has fallen 1.1% this week after closing at a record on Aug. 2. The Dow Jones Industrial Average decreased 48.07 points, or 0.3%, to 15,470.67 today.
“We’re just going through a period of consolidation,” Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis, said by phone for Bloomberg. “We still like the outlook for the broad equity market, but near term we’re probably in a trading range pattern until we get greater clarity as to what happens with quantitative easing.”
Wednesdays losses came amid light trading volumes and after a strong year-to-date rally. “Markets are kind of drifting…It seems theres a bit of an August slowing effect” on trading, said for Wall Street Journal, Stephen Wood, chief market strategist at Russell Investments, “In a market thats up this far, people are booking some profits in this environment.” he added.
In corporate news, Bank of America sank 0.8% to $14.53, paring an earlier loss of as much as 2.7%. The Justice Department said the firm misled investors about the quality of loans tied to $850 million in mortgage-backed securities. The complaint chronicles friction among bank staff in 2007 and 2008 as they excluded risky Alt-A loans while leaving in wholesale debts once scorned as “toxic waste” by the firm’s then-chief.
Disney retreated 1.7% to $65.91 for the steepest decline in the Dow. The world’s biggest entertainment company said third-quarter profit was little changed from the same time last year amid costs to market the box-office disappointment “The Lone Ranger” and shrinking revenue at ABC television network.
First Solar Inc. tumbled 13% to $40.47 for the biggest loss in the S&P 500. The largest U.S. solar-panel manufacturer said yesterday profit fell short of analysts’ estimates as revenue from its current project pipeline slumped. Today’s share-price drop was the steepest in five months.
Luxury electric-car maker Tesla Motors Inc. reported a net loss for the second quarter, but exceeded Wall Street expectations for production and gross margins, sending its shares higher in after-hours trading. The Palo Alto, Calif., company posted a $30.5 million loss, or 26 cents a share, compared with a year-earlier loss of $105.6 million, or $1 a share. Revenue soared to $405.1 million from $26.7 million a year ago when its $80,000 and up Model S plug-in was just beginning deliveries.
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