US stocks dropped for a third day, continuing the slow start of the new year and expanding on declines for the Standard & Poor’s 500 Index, after slower-than-forecast growth in service industries.
The S&P 500 slid 0.3% to 1,826.77 at 4 p.m. in New York. The Dow Jones Industrial Average lost 44.89 points, or 0.3%, to 16,425.10. About 6.5 billion shares changed hands on U.S. exchanges, about 9% above the three-month average, according to data compiled by Bloomberg.
“The big thing were telling clients is to expect less return, and more volatility,” said Rob Stein, senior portfolio manager at Astor Investment Management, which manages $700 million. “Thats not an awful thing, as long as its not excessive volatility.”
The Institute for Supply Managements non-manufacturing purchasing managers index for December slipped to 53 from 53.9 in November, missing expectations of a rise to 54.5. Readings above 50 signal expansion.
Meanwhile, factory orders for November increased 1.8% on the month, above forecasts for a 1.5% rise.
The ADP Research Institute reports the change in companies’ payrolls on Wednesday and minutes from the Fed’s Dec. 17 to 18 meeting will be released the same day. The Labor Department will provide the unemployment rate and new hiring figures for last month on Friday.
European markets erased early gains after data showing the euro zones services sector expanded in line with expectations. The Stoxx Europe 600 gave up 0.2%. The euro-zone services purchasing managers index for December came in at 51, down slightly from 51.2 in November. Readings above 50 signal expansion.
In Asia, Tokyo led the region lower as strength in the yen weighed on the countrys exporters. Japans Nikkei Stock Average slumped 2.3%. Chinas Shanghai Composite dropped 1.8% to a five-month low.
In corporate news, Twitter dropped 3.9% to $66.29. Morgan Stanley lowered the rating on the social-networking company to “underweight”, or sell, from “equal weight”, or hold. Morgan Stanley also cut the rating of Ebay online auction company to “equal weight” from “overweight”. EBay Inc. slid 2.8% to $51.78.
Verizon, the largest US wireless carrier, gained 0.6% to $48.69. T-Mobile agreed to buy airwaves from Verizon Wireless for about $2.4 billion in cash as part of a spectrum swap that will give both companies more network capacity in areas where they need it. T-Mobile, the fourth-largest U.S. wireless carrier, advanced 3.7% to $33.48.
Pandora rose more than 14%, at $31.49, after the Internet-radio leader said that for December, its share of the U.S. radio listening market rose to 8.6% from 7.58% in 2012, while active listeners increased by 13%, to 76.2 million from December 2012, and total listener hours also rose 13%, to 1.58 billion, from 1.39 billion in the prior year.
Microsoft slumped more than 2%, to close at $36.13, even though Microsoft said it sold 3 million of its new Xbox One video game consoles last year.
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