(Reuters) - U.S. stocks edged lower on Wednesday, retracing recent gains along with energy shares, while comments by Federal Reserve Chair Janet Yellen pointing to a possible interest rate hike in December added to investor caution.
S&P energy <.spny>, down 1.0 percent, led the day's decline as U.S. crude oil closed down 3.3 percent. The fall snapped a run of five straight days of gains in the energy index.Stocks added to losses after comments by Yellen, who told Congress the Fed expects the economy to continue to grow at a pace that returns inflation to policy-makers' target and that "if the incoming information supports that expectation ... December would be a live possibility" for a rate increase. Still, S&P utilities <.splrcu>, which tend to fall in a higher-rate environment, were up 0.4 percent, making it the day's best-performing sector.The market is consolidating after a big rally, said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. "The gains have been strong over the past five weeks, and we're due for more of a breather here," he said. The Dow Jones industrial average <.dji> fell 50.57 points, or 0.28 percent, to 17,867.58; the S&P 500 <.spx> lost 7.48 points, or 0.35 percent, to 2,102.31; and the Nasdaq Composite <.ixic> dropped 2.65 points, or 0.05 percent, to 5,142.48.On Friday, Wall Street registered its strongest monthly performance in four years and posted a fifth straight week of gains.Stocks rallied after the Fed's statement last week, when it signaled a December rate hike was still on the table, yet the ongoing debate over when the Fed will make its move has added to investor uncertainty."It's really that uncertainty - investors don't know whether to applaud a rate hike or to fear it," said Bruce Zaro, chief technical strategist at Bolton Global Asset Management in Boston.A raft of data on Wednesday, including a report showing U.S. private employers maintained a steady pace of hiring in October, suggested the economy was strong enough to support ending an era of near-zero interest rates.Time Warner