Wall Street Dips, but Trend Upward Considered Intact

New York: US stocks dipped on Wednesday, putting the S&P 500 on track to retreat for a sixth session out of the past seven, although the longer-term strength of the equity market was still considered intact.

The S&P 500 held below its 14-day moving average, a widely followed technical level, but it remained just 1.1 per cent off a record close hit on Friday.

The index was poised to drop for a third consecutive day, and on Tuesday, posted its biggest one-day drop since August 5. That weakness came on concerns the Federal Reserve could raise interest rates sooner than some investors had expected. Higher rates would raise borrowing costs for individuals and businesses. The Fed's still-accommodative monetary policies have provided a floor for equity prices.

"There's a question of whether the recent weakness is the start of a new trend or just part of a business cycle that remains in an uptrend, but it is clearly the latter," said Anastasia Amoroso, global market strategist with J.P. Morgan Funds in New York.

"Equities offer better value than other asset classes, and so long as the Fed is not overly tight, the bull market will not end. We're nowhere near that level yet."

Energy shares were the biggest declining sector of the day, off 1.2 per cent as crude oil fell 0.6 per cent.

Amoroso suggested the weakness in energy stocks - which are down 4.6 per cent in September - could be a buying opportunity.

"The environment supports the cyclical parts of the market. Industrial and energy stocks are the ones that haven't experienced as much of a multiple expansion as others in the market, and they are also the ones that should outperform in an expanding economy."

The Dow Jones industrial average fell 28.58 points, or 0.17 per cent, to 16,985.29.

The S&P 500 shed 3.63 points, or 0.18 per cent, to 1,984.81.

The Nasdaq Composite dropped 2.86 points, or 0.06 per cent, to 4,549.42.

The largest percentage gainer on the New York Stock Exchange was DHT Holdings Inc, which jumped 10.80 per cent, while the largest percentage decliner was Pulse Electronics Corp, down 16.77 per cent.

Among the most active stocks on the NYSE were Bank of America, up 0.03 per cent at $16.15; US shares of Petroleo Brasil, down 2.36 per cent at $17.41, and the US shares of Vale SA, down 1.76 per cent at $12.30.

On the Nasdaq, Apple Inc was up 0.4 per cent at $98.40; GT Advanced Technologies fell 9.2 per cent to $13.57, and On Track Innovations was up 44.9 per cent at $4.81 - the three were among the most actively traded issues.

Declining stocks outnumbered advancers on the NYSE by 1,790 to 976, for a 1.83-to-1 ratio. On the Nasdaq, 1,259 issues were falling and 1,039 advancing for a 1.21-to-1 ratio favoring decliners.

The broad S&P 500 index was posting three new 52-week highs and four new lows for the day; the Nasdaq Composite was recording 16 new highs and 29 new lows.

Copyright @ Thomson Reuters 2014