US stocks slipped on Wednesday, snapping a four-day winning streak after comments from US Federal Reserve Chairman Ben Bernanke disappointed investors hoping for a strong signal of more stimulus. The Fed chairman's comments drove the dollar up 0.7 percent against a basket of major currencies and sent materials lower. Gold fell 5 percent in late trading. The S&P Materials Index lost 1.7 percent, making it the S&P 500's worst-performing sector.
Bernanke offered a tempered view of the US economy, pouring cold water on the notion that recent upbeat signs herald a stronger recovery. But he gave no hint of new asset purchases, which the Fed has used in recent years to boost growth. The modest scope of the day's decline indicates investors were inclined to take some profits after a five-month rally that has driven the S&P 500 up 8.6 percent since the end of December.
------ Monthly market volume drops 12pc from year ago
Stocks registered healthy gains for the month of February, following equally robust gains for January. Reports suggesting more improvement in the economy curbed the day's losses, however. The Nasdaq briefly topped 3,000 for the first time since mid-December 2000.
The Nasdaq's move follows the Dow's close above 13,000 for the first time since May 2008 on Tuesday, the latest in a string of new milestones for the market, and analysts said traders may have been booking profits after the new highs. Techs, which drove Tuesday's advance, helped lead the retreat, with the Philadelphia Semiconductor index down 1.6 percent.
The Dow Jones industrial average shed 53.05 points, or 0.41 percent, to close at 12,952.07. The Standard & Poor's 500 Index slipped 6.50 points, or 0.47 percent, to 1,365.68. The Nasdaq Composite Index dropped 19.87 points, or 0.67 percent, to 2,966.89. For the month, the Dow gained 2.5 percent, the S&P 500 rose 4.1 percent and the Nasdaq climbed 5.4 percent.
In February, daily volume on the New York Stock Exchange, NYSE Amex and Nasdaq has averaged 6.87 billion shares. Last year, the average daily volume in February was 7.81 billion. But Wednesday's volume flew in the face of the recent trend, with composite trading volume on the NYSE, NYSE Amex and the Nasdaq at the highest level since December 16 - at 8.3 billion shares.
Among reports that helped to limit losses, the Fed said in its Beige Book that the US economy expanded modestly in January and through mid-February. Other economic data showed the US economy grew slightly faster than initially thought in the fourth quarter, while the pace of business activity in the US Midwest picked up in February to its highest level in 10 months.
Among the day's decliners, Lufkin Industries Inc fell 2.3 percent to $79.64 after the seller of oilfield pumping units and power transmission products said it will acquire UK's Zenith Oilfield Technology Ltd for about $127 million in cash. On the NYSE, decliners led advancers by a ratio of about 2 to 1, while on the Nasdaq, about three stocks fell for every one that rose.
Comments
Comments are closed.