Wall Street dips for the third straight day
Two measures of activity in the services sector indicated slower growth in December, indicating the economic recovery remains modest, while a separate report showed factory orders rose as expected in November.
The S&P 500 closed out 2013 with a gain of 2.4 percent in December, its fourth straight month of gains. But the benchmark index has stumbled in the first three trading sessions out of the gate in 2014, falling more than 1 percent so far in January.
“With respect to the data, there were no huge surprises so with that huge year-end rally and working off that overbought condition, there is the potential for days like this where we don’t get a lot of market movement,” said Todd Salamone, vice president of research at Schaeffer’s Investment Research in Cincinnati.
Salamone also said investors may be hesitant, with earnings season on the horizon as well as events such as Friday’s payrolls report and the release of the Fed minutes on Wednesday.
The Dow Jones industrial average fell 44.89 points or 0.27 percent, to end at 16,425.10. The S&P 500 lost 4.60 points or 0.25 percent, to finish at 1,826.77. The Nasdaq Composite dropped 18.226 points or 0.44 percent, to close at 4,113.681.
Volume was modest, due in part to icy conditions that snarled travel across the U.S. Midwest. Thousands of flights were canceled or delayed over the weekend, as forecasters warned that life-threatening cold was heading eastward.
About 5.44 billion shares traded on U.S. exchanges, short of the 5.71 billion average so far this month, according to data from BATS Global Markets.
Apparel retailer Men’s Wearhouse mounted a hostile bid for rival Jos. A. Bank Clothiers with an increased offer, days after the smaller rival raised its buyout defenses. Men’s Wearhouse shares gained 2.2 percent to $51.68, and Jos. A Bank shares climbed 4.5 percent to $56.87.
Twitter shares fell 3.9 percent to $66.29 after being downgraded by Morgan Stanley. The stock had surged nearly 70 percent in the past six weeks. The firm also cut eBay to “neutral weight,” sending its shares down 2.8 percent to $51.78.
The S&P telecom sector index, up 0.5 percent, was the best performing of the 10 major S&P sectors after T-Mobile US Inc. said it is buying wireless airwave licenses from Verizon Wireless to improve its high-speed network in a $3.3 billion deal, adding that it hopes to follow up with more spectrum purchases. T-Mobile shares shot up 3.7 percent to $33.48 while Verizon Communications Inc. rose 0.6 percent to $48.69.
Ford Motor Co. and its local partners boosted sales in China by nearly 50 percent last year, nudging past Japanese giants Toyota and Honda to make big inroads into the world’s largest auto market. Ford shares rose 0.5 percent to $15.58.
Solar panel shares garnered attention. ReneSola advanced 3.9 percent to $4.23 after the company secured a contract to supply solar panels to a solar project developer based in Japan. SolarCity jumped 7.3 percent to $63.61 after Goldman Sachs added the stock to its “conviction buy” list.
The U.S. Senate is set to vote at 5:30 p.m. to confirm Janet Yellen as the next chair of the Federal Reserve. Yellen, who has been the Fed’s vice chair since 2010, is poised to become the first woman to head the U.S. central bank. She is widely seen as continuing the policies set in place by Ben Bernanke, who will step down as Fed chairman at month’s end.
Declining stocks outnumbered advancing ones on the New York Stock Exchange by a ratio of about 8 to 7, while on the Nasdaq, about 16 stocks fell for every nine that rose.