U.S. stocks retreat after S&P 500 Index rallies for six weeks

Obama Speech

In the U.S., President Barack Obama will present his legislative priorities for the year in his annual State of the Union address to a joint session of Congress on Tuesday night. The speech is his first State of the Union after being elected to a second term and he is likely to focus on gun control, immigration law and avoiding automatic spending cuts.

Senate Democrats are close to proposing a $120 billion plan for a 10-month delay in the cuts set to begin March 1, according to a Senate Democratic aide. The aide, who asked not to be identified in discussing the proposal, said half of the cost of delaying the across-the-board cuts would be covered by revenue increases and the other half by spending reductions.

Goldman Sachs Group Inc. cut its three-month recommendation on global equities to neutral from overweight, saying investors “will need time to digest the recent gains.”

“The potential for a strong rally from here is likely to be limited in the near term as U.S. equities are trading slightly above our estimates of current fair value,” Goldman Sachs analysts led by Anders Nielsen and Peter Oppenheimer wrote in a client note dated Feb. 8.

Industry Returns

Eight out of the 10 S&P 500 groups retreated as energy and consumer-discretionary companies fell the most, erasing at least 0.4%. Financial and utility shares added more than 0.1%.

The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, climbed 1% to 13.15.

Google retreated $4.66 to $780.71. Schmidt’s planned share sales, worth about $2.5 billion, represent 42% of his stake in the company. The sales may take place over a maximum period of a year, Google said.

Green Mountain Coffee Roasters Inc. slipped 4.7% to $43.02. The maker of Keurig brewers and single-serve pods was cut to neutral from buy at Dougherty & Co.

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