The S&P 500 briefly pared losses after the Federal Reserve said in its Beige Book business survey that the U.S. economy expanded “modestly” last month. The benchmark equity measure has retreated for the past four days as the IMF reduced estimates for global economic growth. The index has still rallied 12 percent from this year’s low on June 1 as the Fed unveiled a third round of bond purchases.
Alcoa lost 4.1 percent to $8.76. The first member of the Dow average to report results trimmed its forecast for growth in aluminum consumption this year to 6 percent from 7 percent amid slowing demand from China. The company posted third-quarter earnings and sales yesterday that exceeded analysts’ projections.
Investors sold shares of companies most tied to economic growth. The Morgan Stanley Cyclical Index, a gauge of 30 U.S. stocks, lost 0.8 percent to decline for the third straight day. All 10 groups in the S&P 500 fell, as energy companies slumped 1.7 percent for the biggest loss. Tesoro Corp. erased 6.1 percent, the most in the benchmark equity index, to $38.49. Material stocks retreated 1 percent for the second-largest drop.
Chevron slipped 4.3 percent to $112.30 after the company said earnings dropped in the third quarter from the previous period amid lower oil output because of Hurricane Isaac, falling crude prices and weaker U.S. refining returns. Oil and natural gas output declined 4 percent to the equivalent of 2.518 million barrels a day in June and July from 2.624 million for the entire second quarter. Chevron also said a shuttered crude-processing unit at a California refinery won’t resume operations before the end of the year.
H&R Block Inc. retreated 4.7 percent to $16.79. The largest U.S. tax preparer hired Goldman Sachs Group Inc. to advise on alternatives for its bank. The Kansas City, Missouri-based company is considering dropping its designation as a savings and loan holding company after the Fed proposed rules requiring such firms to keep additional capital.
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