U.S. Stocks Fall From Record as Banks, Energy Producers Retreat

(Bloomberg) --U.S. stocks fell, sending the S&P 500 Index down by the most in more than a week as energy producers tumbled with the price of crude, while banks shares sank on speculation interest rates won't rise this year. Earnings from Perrigo Co. to Wendy's Co. disappointed.

The S&P 500 lost 0.3 percent to 2,174.06 at 11:47 a.m. in New York, after the measure closed a point from an all-time high. The Dow Jones Industrial Average slid 39.55 points to 18,493.50, and the Nasdaq Composite Index slipped 0.5 percent after closing at a record for the second time in three sessions.

“It's not a good day for energy at all,” Mark Kepner, an equity trader at Themis Trading LLC in Chatham, New Jersey, said by phone. “With financials it's about the 10 year, we're back to 1.50 again. Despite the jobs number there's that feeling the Fed is probably going to be on hold for September and that's why I think financials are tailing off again.”

Losses picked up speed at about 11:15 a.m. in New York as the S&P 500 slipped past its lowest points of the previous two days, around 2,178. Coupled with the market's failure to close at a record Tuesday, chart analysts say the potential for a decline increased.

“We broke through the new highs yesterday and didn't hold them,” said Walter “Bucky”Hellwig, who helps manage $17 billion as senior vice president at BB&T Wealth Management in Birmingham, Alabama. “From a technical standpoint, that was not particularly good -- in the short-term that can portend more sideways movement.”

The S&P 500 trimmed its annual increase to 6.4 percent and its valuation stood at the highest in more than a decade on an estimated earnings basis. The benchmark has failed to rise or fall more than 1 percent in either direction for 22 straight days, the longest such streak since 2014. The lack of price swings had sent the CBOE Volatility Index to a more than two-year low.

Transocean Ltd. and Exxon Mobil Corp. fell at least 1 percent to lead energy companies lower after crude tumbled on data showing an increase in crude inventories amid weakening refinery demand. Banks retreated as yields on the 10-year Treasury note slid on speculation the Federal Reserve won't rush to raise interest rates. Perrigo plunged 10 percent, the most in the S&P 500, after cutting its annual earnings forecast.

More than 90 percent of S&P 500 members have posted quarterly results this season, of which 78 percent beat profit predictions and 56 percent topped sales projections. Michael Kors Holdings Ltd., among four companies on the index reporting today, fell 1.5 percent after its quarterly comparable sales fell more than expected.

Analysts have tempered their estimates for a decline in second-quarter net income to 2.7 percent, from a 5.8 percent drop less than a month ago. Forecasts for the current quarter ending in September have turned negative, indicating a sixth consecutive period of falling profits, the longest since the financial crisis.