The stock market got off to a slow start in April, edging lower on Monday after a week when the Standard Poor’s 500-stock index eclipsed its nominal high.
The main catalyst was slowing growth in manufacturing last month. The decline in the Institute for Supply Management’s benchmark manufacturing index for March was worse than economists had forecast. Stocks started falling shortly after the report was released at 10 a.m. and stayed lower the rest of the day.
The Dow Jones industrial average closed down 5.69 points, or 0.04 percent, at 14,572.85. The S. P. 500 dropped 7.02 points, or 0.5 percent, to 1,562.17.
Industrial companies fell 1 percent, the most in the S. P. 500. Caterpillar, which makes construction and mining equipment, declined $1.33, or 1.5 percent, to $85.64, and 3M, which makes Post-it notes, industrial products and construction materials, fell 66 cents, or 0.6 percent, to $105.65.
Investors have raised their expectations for the American economy as the market has climbed this year, said Joe Kinahan, chief derivatives strategist at TD Ameritrade. The Dow is up 11.2 percent in 2013; the S. P., 9.5 percent.
“The numbers have to be outstanding in order to drive the market higher,” Mr. Kinahan said. “It’s a different mind-set when we’re at these levels.”
The S. P. 500 ended the first quarter at a high of 1,569.19, surpassing its previous record close of 1,565.15 on Oct. 9, 2007. The index has recaptured all of its losses from the financial crisis and recession. The Dow broke its high, also set in 2007, on March 5.
The market has risen this year because of optimism that housing is recovering and that employers are starting to hire again. Strong company earnings and continuing stimulus from the Federal Reserve have also increased demand for stocks.
Small stocks fared worse than large ones Monday. The Russell 2000 index, a benchmark of small-company stocks, fell 1.3 percent to 938.78, paring its gain for the year to 10.5 percent. It was the index’s biggest decline in more than a month. The Nasdaq composite index fell 28.35 points, or 0.9 percent, to 3,239.17.
April is historically the second-strongest month for stocks, behind December, Deutsche Bank analysts said in a report released Monday. The S. P. 500 has gained an average of 1.4 percent in April, based on returns since 1960.
The last meaningful setback for stocks started before the elections last November. The market slid 6 percent from Oct. 1 through Nov. 15 before the vote and immediately afterward over concerns that Congress and the administration would be unable to enact measures to continue economic growth.
Evidence that growth was continuing, despite political discord in Washington, has kept stocks on an upward trajectory since then, leaving investors waiting for dips to add to their holdings.
”I’d love to have some sort of a pullback here because I’d think it’s an opportunity,” said Scott Wren, an equity strategist at Wells Fargo Advisors. “But it doesn’t feel like we’re going to have one in the near term.”
Among the stocks on the move, Tesla Motors, the electric car company, rose $6.04, or 16 percent, to $43.93 after it said Sunday night that first-quarter sales have exceeded 4,750 Model S sedans, above its previous forecast of 4,500.
DFC Global, a finance company that lends to consumers who lack bank accounts, fell $3.60, or 22 percent, to $13.04 after slashing its earnings estimate for its fiscal year because of loan defaults in its business in Britain.
American Greetings rose $1.95, or 12 percent, to $18.05 after the company agreed to be taken private for about $602 million by a group led by some of its top executives.
In the bond market, interest rates eased slightly. The price of the Treasury’s 10-year note rose
5/32, to 101 16/32, while its yield slipped to 1.84 percent, from 1.85 percent late Thursday. (The bond and stock markets were closed Friday in observance of Good Friday.)
This article has been revised to reflect the following correction:
Correction: April 1, 2013
An earlier version of this article, and its capsule summary, misstated the day when the Standard Poor’s 500-share index reached a new closing high. The high was reached last Thursday, not Friday.
Article source: http://www.nytimes.com/2013/04/02/business/economy/daily-stock-market-activity.html?partner=rss&emc=rss