U.S. stocks fell, extending yesterday’s drop, as a slump in Apple Inc. and the federal budget stalemate offset an increase in industrial production and data showing China’s manufacturing may expand at a faster pace.
Apple, the most valuable company, sank 3.8 percent as UBS AG cut its share-price estimate. Best Buy Co. slumped 15 percent after extending founder Richard Schulze’s deadline to make an offer to take the company private. Smith & Wesson Holding Corp. slumped 4.3 percent as the killing of children at a Connecticut elementary school spurred speculation of tighter gun-control laws. U.S. Steel Corp. and Alcoa Inc. added more than 1.7 percent to pace gains in commodity companies.
The Standard & Poor’s 500 Index fell 0.4 percent to 1,413.58 at 4 p.m. New York time. The benchmark measure for American equities lost 0.3 percent this week. The Dow Jones Industrial Average slid 35.71 points, or 0.3 percent, to 13,135.01 today. About 5.8 billion shares changed hands on U.S. exchanges, or 6.7 percent below the three-month average.
“The chances of some type of grand bargain in Washington are significantly diminishing as time passes,” said Eric Teal, chief investment officer at First Citizens Bancshares Inc., which manages $4.5 billion in Raleigh, North Carolina. “On a company level, investors are looking at the competitive landscape for Apple and they see threats.”
Nine out 10 industries in the S&P 500 retreated as technology, the biggest group, led the losses. President Barack Obama and Republican House Speaker John Boehner remained deadlocked yesterday during their third White House meeting on next year’s budget.
In China, the December preliminary reading was 50.9 for a purchasing managers’ index released by HSBC Holdings Plc and Markit Economics, beating estimates. Industrial production in the U.S. rose in November by the most in two years.
“We’ve had further confirmation of a soft landing in China,” said Michael Strauss, who helps oversee about $26 billion as chief investment strategist at Commonfund in Wilton, Connecticut. He spoke in a phone interview. “That’s good for markets. Yet people are still worrying about the fiscal cliff. It’s going to be a 24th hour or overtime event.”
The S&P 500 has dropped 0.2 percent this month, paring its 2012 rally to 12 percent. Its average increase for December is 1.5 percent, the most of any month except July, according to data dating back to 1928 compiled by Bloomberg.
Apple sank 3.8 percent to $509.79. UBS cut its price estimate to $700 from $780, citing concern that growth may slow for the iPhone and iPad.