U.S. stocks fall from record level as manufacturing index slips

Volatility Increases

The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against claims, jumped 8.7 percent to 13.80 today. The gauge, known as the VIX, dropped 6.4 percent last week, and is down 23 percent for the year.

Industrial and raw-material shares dropped at least 1.1 percent for the biggest losses among 10 S&P 500 groups. Investors sold shares of companies most tied to economic growth, sending the Morgan Stanley Cyclical Index down 1.2 percent and the Dow Jones Transportation Index lower by 1.4 percent.

Joy Global, the world’s largest maker of underground mining equipment, lost 3.3 percent to $57.53. Freeport-McMoRan, the world’s second largest copper miner, retreated 2.5 percent to $32.28, and U.S. Steel slipped 4.1 percent to $18.70.

Hess, the New York-based energy company, jumped 3.2 percent to $73.87 after MFP Investors’ Price said in a “Bloomberg Surveillance” television interview with Tom Keene and Sara Eisen today that the firm could be acquired at $80 to $90 a share.

‘Trophy Assets’

“Hess is sitting there with trophy assets, huge position in the Bakkens,” Price said. “Somebody could surface and just pop an $80 to $90 bid.”

The company announced today an agreement to sell its holding in Russian subsidiary Samara-Nafta for $2.05 billion to OAO Lukoil.

J.C. Penney Co. slipped 1.8 percent to $14.84. Price, who made his reputation as a value investor in the 1980s by buying shares of beaten-down lenders, said that his investment in the department-store company has been “a big mistake.”

Shares of the department-store company plunged 65 percent since its February 2012 high as sales tumbled in the first year of a transformation plan under Chief Executive Officer Ron Johnson.

Technology Shares

Technology stocks retreated 0.9 percent as a group. Boise, Idaho-based Micron Technology Inc. fell the most in the S&P 500, declining 5.5 percent to $9.43. Advanced Micro Devices Inc., the Sunnyvale, California-based chipmaker, slipped 3.7 percent to $2.46.

General Mills Inc., with food brands from Yoplait yogurt to Pillsbury cookie dough, slipped 1.3 percent to $48.66 after Morgan Stanley downgraded the shares to equal weight from overweight.

Tesla increased 15 percent to $43.69. The electric-car maker headed by billionaire Elon Musk reached “full profitability” as sales of its Model S sedan were more than 250 units higher than the 4,500 projected in mid-February, according to a company statement yesterday that didn’t specify the profit figure.

EBay Inc., operator of the largest online marketplace, added 2.9 percent to $55.80 after Canaccord Genuity Corp. equity analyst Michael Graham upgraded the shares to buy from hold. The 12-month target price is $67.

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