Stocks fell on Wednesday, putting the S&P 500 on track for its worst day in about three weeks, as sliding oil and metals prices gave investors a reason to sell commodity-related shares. A weaker-than-expected report on February durable goods orders deflated some of the recent investor optimism and provided a catalyst for the selling. The data was taken as a sign of tepid growth in the first quarter. Analysts said quarter-end stock buying, which lifted stocks earlier this week, may be easing.
The S&P 500 is still up 11.4 percent so far for the first quarter, which is expected to be the best three-month period for the broad market index since the third quarter of 2009. Window dressing at the "end of quarter has probably driven up stock prices over the last couple of days," said Robbert Van Batenburg, head of equity research at Louis Capital in New York. "That upward pressure is fading away," he added. "If you buy a stock now, it's going to settle on Monday, and it won't show up in the first-quarter results."
The S&P 500 materials sector index <.GSPM>, down 1.9 percent, led the broad market's decline, followed by the S&P energy sector index <.GSPE>, down 1.5 percent. All 10 S&P 500 sectors were lower. Caterpillar Inc , down 3.7 percent at $104.03, was the biggest drag on the Dow. Major oil companies Exxon Mobil Corp , down 1.3 percent at $85.47, and Chevron Corp , down 1.4 percent at $105.50, also weighed heavily on the blue-chip average.
The Dow Jones industrial average <.DJI> was down 88.47 points, or 0.67 percent, at 13,109.26. The Standard & Poor's 500 Index <.SPX> was down 9.93 points, or 0.70 percent, at 1,402.59. The Nasdaq Composite Index <.IXIC> was down 20.21 points, or 0.65 percent, at 3,100.14. Despite the decline, the S&P 500's ability to hold the 1,400 level was an indication that the market's uptrend was still in place, said Jim Paulsen, chief investment officer at Wells Capital Management.
U.S. May crude oil futures slid $1.92, or 1.79 percent, to settle at $105.41 a barrel, after data showed a sharp increase in crude inventories in the United States in the latest week. The prospect of a release of some U.S. and European strategic oil reserves also helped drive oil prices lower.
Gold and copper prices also fell as the durable goods orders raised questions about the U.S. economy's pace of recovery and curbed investors' appetite for risk.
Data showed new orders for U.S. manufactured goods rose 2.2 percent in February, falling short of a consensus forecast for a 3 percent gain, while a gauge of future business investment also missed forecasts, casting a shadow on the manufacturing sector's support of the recovery.
Much of the market's recent gains have come after improved economic data and accommodative monetary policies by the U.S. Federal Reserve and other central banks around the world. On Tuesday, Fed Chairman Ben Bernanke, asked in an ABC News interview about the potential for more quantitative easing, said the Fed wasn't taking any options off the table.
In the tech sector, the stock of Apple Inc hit yet another lifetime high of $621.45 earlier in the day. The company said it will offer buyers of its new iPad in Australia a refund after it was accused of misleading advertising. By late afternoon, Apple had given up some of its earlier gains. It was trading at $617.80, up 0.5 percent.
(Additional reporting by Angela Moon)