US stocks fell on Thursday as expectations for quick stimulus action from the Federal Reserve faded and Chinese and euro zone data pointed to a stalling global economy. Each of the 10 major S&P sectors finished in negative territory, with the economically sensitive materials sector the worst performer, down 1.7 percent.
A slump in Hewlett-Packard shares weighed on the technology sector, but the S&P 500 stayed above a support level at 1,400, which is seen as a positive sign. --- Big Lots tumbles more than 20pc after results
Minutes published from the latest Federal Reserve meeting indicated the central bank might be ready for another round of stimulus for the economy, supporting equities on Wednesday. Investors speculated another round of quantitative easing by the Fed was a possibility. However, St. Louis Fed President James Bullard, a non-voting member of the Federal Open Market Committee, said on CNBC that US data has been somewhat better since the July 31-August 1 Fed meeting and the minutes were "a bit stale."
"You can definitely correlate (the decline) with Bullard's comments this morning trying to temper expectations," said Seth Setrakian, co-head of US equities at First New York Securities in New York. The Dow Jones industrial average dropped 115.30 points, or 0.88 percent, to 13,057.46. The Standard & Poor's 500 Index lost 11.41 points, or 0.81 percent, to 1,402.08. The Nasdaq Composite Index fell 20.27 points, or 0.66 percent, to 3,053.40.
The S&P 500 is up nearly 10 percent since June 1 after hitting a four-year high earlier this week. However, recent losses have put the benchmark S&P 500 index on pace for its first weekly drop in seven as the rally appeared to be losing steam. Fed Chairman Ben Bernanke in the past has used annual conferences in Jackson Hole, Wyoming, to signal publicly the Fed's intentions, but investors this time may be disappointed.
A group of brokerages cut their price targets on Hewlett-Packard's stock after the No 1 personal computer maker posted an $8.9 billion loss and cut its earnings outlook for the year, echoing concerns raised by rival Dell about faltering demand for PCs. HP shares fell 8.1 percent to $17.65 as the worst performer on the Dow and Dell extended recent losses, slipping 3.8 percent at $11.24. The NYSEArca computer hardware index dropped 1.6 percent.
Contributing to weakness in the materials sector, shares of US steel producers fell after a Dahlman Rose analyst downgraded the sector, saying prices of the metal will decline. US Steel fell 6.9 percent to $21.19 Big Lots shares tumbled 20.8 percent to $30.76 as the biggest percentage decliner on the S&P 500 after the retailer reported a lower-than-expected quarterly profit and cut its full-year adjusted earnings forecast.
Volume was light with about 5.23 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below the daily average of 6.62 billion. Declining stocks outnumbered advancing ones on the NYSE by 2,036 to 906, while on the Nasdaq, decliners beat advancers 1,657 to 800.