U.S. stocks decline after S&P rally on Fed policy statement

Disney Downgrade

Walt Disney dropped 2.3% to $65.57 for the steepest loss in the Dow. Morgan Stanley cut Disney to equalweight from overweight, its first downgrade of the shares in more than four years, saying the company’s growth now depends more on its creative success. Disney delayed the Pixar film “The Good Dinosaur” by 18 months, leaving the animation studio that produced “Toy Story” without an annual release for the first time since 2005.

Zions Bancorporation fell 4% to $27.59 and KeyCorp retreated 3.7% to $11.62, for the biggest declines in the S&P 500. Regional lenders had been rooting for the Fed to let interest rates rise, which would help bring relief to bankers who’ve seen lending margins squeezed and expenses pushed up by new technology and regulations.

Life insurer Lincoln National Corp. tumbled 3.7% to $42.19 and MetLife Inc. lost 3% to $47.17. Insurers invest in bonds to back future obligations to policyholders and low yields can pressure profits.

Oracle Slips

Oracle Corp. declined 0.8% to $33.59. The largest maker of corporate-database software issued a weaker-than- projected outlook for the remainder of the year, warning that it still has to close big corporate deals to remain on course.

Pier 1 Imports Inc. plunged 12% to $20.85. The home furnishings retailer cut its earnings forecast for the year after second-quarter profit fell short of analysts’ predictions. Same-store sales increased 3.5% in the quarter, compared with the average analyst estimate of 6.5%.

Apple Gains

Technology and industrial shares had the best performance among S&P 500 industries. Apple jumped 2.2% to $474.89.

Agilent increased 4.8% to $51.68 on its plan to split into two businesses. One company will focus on life sciences, diagnostics and applied markets, retaining the Agilent name. The other will be comprised of Agilent’s current portfolio of electronic measurement products, according to a statement.

Rite Aid surged 20% to $4.44. The drugstore chain raised its annual profit and revenue forecasts after second- quarter results exceeded analyst estimates, helped by an increase in same-store pharmacy sales.

Take-Two Interactive Software Inc. advanced 1.6% to $17.48. The video game maker said first-day sales of “Grand Theft Auto V” topped $800 million worldwide, surpassing the record set by “Call of Duty: Black Ops II” last November.

Groupon Inc. gained 8.7% to $12.56. The daily deals provider was raised to buy from hold at Stifel Nicolaus & Co.

Tesla Motors Inc. climbed 7.3% to $178.41. Deutsche Bank analyst Rod Lache said in a note the electric car maker is on track to “modestly” outperform margin expectations for the third quarter and raised his price target to $200 from $160.


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