The Standard Poor’s 500-stock index posted its worst daily percentage decline since mid-November on Wednesday after minutes from a Federal Reserve meeting indicated widening divisions among Fed officials about the value of its efforts to reduce unemployment.
The S.P. 500 fell 1.2 percent, and the Dow Jones industrial average fell 0.8 percent, or about 108 points. The Nasdaq composite lost 1.5 percent.
“What Wall Street wants to hear is an absolute sign that the Fed will continue with Q.E. for the indefinite future,” said Todd Schoenberger, managing partner at Landcolt Capital in New York, referring to quantitative easing. “When it says we may end it faster, that just raises the uncertainty and the market hates that.”
Energy companies’ shares were among the weakest. Devon Energy, an American oil and gas producer, reported a fourth-quarter loss as it wrote down the value of its assets by $896 million because of weak gas prices. Its shares were down 6.6 percent.
Toll Brothers, the luxury homebuilder, lost 9.1 percent after it reported first-quarter results well below analysts’ estimates.
SodaStream dropped 6.4 percent after the seller of home carbonated drink maker machines posted fourth-quarter earnings and provided a 2013 outlook.
According to Thomson Reuters data through Tuesday morning, of the 391 companies in the S.P. 500 that have reported results, 70.1 percent have exceeded analysts’ expectations, compared with a 62 percent average since 1994 and 65 percent over the last four quarters.
Fourth-quarter earnings for S.P. 500 companies are estimated to have risen 5.6 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.
Data released on Wednesday suggested that the economy continued to show modest improvement. Groundbreaking to build new homes in the United States fell 8.5 percent in January, but new permits for construction rose to a four-and-a-half-year high. In addition producer prices rose in January for the first time in four months.
Equities have been strong recently, but they have traded within a narrow range for the last few weeks, suggesting valuations may be stretched at current levels.
“The market seems very tired and listless, and investors are prone to take profits now as they wait for the music to stop,” said Matt McCormick, money manager at Bahl Gaynor in Cincinnati.
Article source: http://www.nytimes.com/2013/02/21/business/daily-stock-market-activity.html?partner=rss&emc=rss
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