Stocks are falling at the anniversary of a bull market that sent the S&P 500’s price-earnings ratio to 17, approaching the level where equities peaked in 2008. The advance is about a week away from supplanting the stretch of equity gains that lasted from 1982 to 1987 to become the fifth longest of all time, according to Bespoke Investment Group LLC.
It’s also three weeks before the end of the first quarter, a period for which Wall Street analysts have lowered forecasts for U.S. earnings growth to 1.9% from 6.6% at the start of 2014, according to data compiled by Bloomberg. For all of 2014, analysts see profits climbing 7.6%, compared with an estimate of 9.7% at the end of December.
The decline in equities comes after more than $41 billion returned to U.S. exchange-traded funds that own shares in the past four weeks, reversing withdrawals that swelled to as much as $40.2 billion last month, according to data compiled by Bloomberg.
The Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility, rose 15% to 16.58 today. The measure has advanced 21% this year.
Nine of 10 main industries in the S&P 500 fell today, with industrial and technology shares dropping more than 1.7%. The Morgan Stanley Cyclical Index tumbled 1.8% and the Dow Jones Transportation Average slid 1.7%.
An S&P index of homebuilders lost 3.2%, bringing its decline for the month to 8.6%, as Toll Brothers Inc. dropped 3.5% to $36.44 and PulteGroup Inc. declined 3.4% to $19.01.
Discount retailer Dollar General slipped 3.2% to $57.37 after forecasting first-quarter earnings of no more than 74 cents a share, below the 81 cents estimated by analysts.
Family Dollar Stores Inc. tumbled 2.3% to $60.25.
Offshore drillers decreased after ISI Group said in a client note that deepwater rig demand is weaker than the market has anticipated. Diamond Offshore Drilling Inc. slid 4.7% to $44.22, the lowest level since 2005. Noble Corp. fell 4.9% to $28.88. Transocean Ltd. erased 3% to $39.57.
PVH Corp., which owns Calvin Klein, declined 5.6% to $115.20. The company was downgraded to market perform from outperform at Wells Fargo & Co., while Morgan Stanley lowered its rating to equalweight from overweight.
Williams-Sonoma Inc. jumped 9.8% to $64.72. The seller of cookware and home furnishings forecast same-store sales growth of 5% to 7% this year, compared with the 3.7% average analyst projection. Revenue will reach $4.63 billion to $4.71 billion, Williams-Sonoma predicted. Analysts had estimated a number at the low end of that range, data compiled by Bloomberg show.