By Joseph Ciolli - Apr 4, 2012 8:42 PM GMT+0700
U.S. stocks fell, sending the Standard & Poor’s 500 Index lower for a second day, as demand dropped at a Spanish bond auction and the Federal Reserve signaled it may refrain from more monetary stimulus.
Wells Fargo & Co. (WFC) and Bank of America Corp. (BAC) retreated at least 1 percent, pacing losses among financial shares. SanDisk Corp. (SNDK), the biggest maker of flash-memory cards, tumbled 8.5 percent after cutting its forecast for first-quarter sales and profitability.
The S&P 500 dropped 0.8 percent to 1,402.10 at 9:40 a.m. New York time. The Dow Jones Industrial Average slipped 113.26 points, or 0.9 percent, to 13,086.29 today.
“It doesn’t matter what the news is today, I don’t think it’ll stem a decline,” Richard Weeks, the Vienna, Virginia- based managing director and partner at HighTower’s VWG Wealth Management. His firm oversees more than $20 billion. “The market is showing signs that it’s ready for a little consolidation. You could make a case that the market is looking for an excuse to pause and digest some of its gains.”
The S&P 500 dropped 0.4 percent yesterday as the minutes of the March 13 meeting of the Federal Open Market Committee showed a decreased urgency for further monetary stimulus. The Fed will refrain from increasing monetary accommodation unless economic expansion falters or prices rise at a rate slower than its 2 percent target. The S&P 500 rallied to its highest level since May 2008 on April 2 after a gauge of U.S. manufacturing climbed more than estimated.
Spanish Auction
Spain sold 2.59 billion euros ($3.4 billion) of bonds at an auction today, the Bank of Spain said. That was less than the maximum target of 3.5 billion euros. It auctioned 973 million euros of five-year notes at an average yield of 4.32 percent. Investors bid for 2.46 times the amount of debt allotted. That compared with a bid-to-cover ratio of 2.59 at the previous auction of the securities on March 1.
A report at 10 a.m. New York time will show that service industries in the U.S. expanded at a slower pace in March, economists said. The Institute for Supply Management’s non- manufacturing index fell to 56.8 from 57.3 in February, according to the median estimate in a Bloomberg News survey of 68 economists. Readings greater than 50 signal growth.
Employment increased by 209,000 for the month after a revised 230,000 gain in February, figures from ADP Employer Services showed today. The median estimate in the Bloomberg News survey called for a 206,000 increase.
SanDisk Sinks
SanDisk sank 8.5 percent to $45.79 after predicting revenue in the quarter that ended April 1 of about $1.2 billion. That compared with an earlier forecast for sales of $1.3 billion to $1.35 billion. Gross margin, a measure of profitability, will be less than the company’s previous prediction of 39 percent to 42 percent, SanDisk said.
Chevron Corp. (CVX), the second-biggest U.S. oil producer, slipped 1.1 percent to $105.93, while Transocean Ltd., the biggest operator of offshore drilling rigs, dropped 2.1 percent to $52.50.
A Brazilian federal prosecutor sued the two companies for 20 billion reais ($11 billion) over a second oil spill at the Frade field off the nation’s coast. Prosecutors filed a 20 billion-reai lawsuit last year following the first spill at project -- a 3,000-barrel leak in November.
Gold miners declined as metals fell. Freeport-McMoRan Copper & Gold Inc. (FCX) slipped 2 percent to $37.81, while Barrick Gold Corp. (ABX) lost 2 percent to $42.10.
To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
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