U.S. stocks retreated, with health- care and technology shares leading losses after the Standard & Poor’s 500 Index rose to a record earlier amid optimism about the economy.
Trading may be subject to unexpected swings today because of a quarterly event known as quadruple witching, when futures and options contracts on indexes and individual stocks expire. Symantec Corp. slumped 14 percent after firing its chief executive officer. LIN Media LLC surged the most in almost five years after Media General Inc. agreed to buy the owner of local TV stations in a deal valued at about $1.6 billion.
The S&P 500 was down 0.4 percent at 1,864.02 at 3:40 p.m. in New York. The gauge has climbed 1.3 percent this week and earlier rose above its previous record of 1,878.04 reached March 7. Trading in S&P 500 stocks was 35 percent above the 30-day average at this time of day. The Dow Jones Industrial Average lost 34.16 points, or 0.2 percent, to 16,296.89.
“It’s a combination of it being witching day, plus the continuation of uncertainty on the geopolitical front,” Chad Morganlander, a Florham Park, New Jersey-based fund manager at Stifel Nicolaus & Co., which oversees about $150 billion of assets, said in a telephone interview. “That’s forced the traders to square their books going into the weekend. Days like this are typically volatile.”
Stocks erased gains today after the S&P 500 earlier reached levels it has repeatedly failed to surpass this month. Before today, its previous intraday high was 1,883.57, reached March 7, and the gauge touched 1,881.94 on March 6 and 1,882.35 on March 11.
The S&P 500 has recovered from its drop on March 19 when Federal Reserve Chair Janet Yellen said the central bank’s stimulus program could end this fall and benchmark interest rates could rise about six months later. Stocks gained yesterday as data on leading indicators and regional manufacturing fueled economic optimism, overshadowing concern that interest rates may rise in the middle of next year.
“We saw a group of reports on Thursday that were pretty strong overall, and those signs of economic strength have carried over into today,” Joe Bell, senior equity analyst at Cincinnati-based Schaeffer’s Investment Research Inc., said in a phone interview. “Perhaps there’s some pent-up demand that is going to translate into improvement with the economic reports coming next week.”
Three rounds of Fed stimulus and low interest rates have helped boost the equity gauge as much as 178 percent from a 12- year low as U.S. stocks enter the sixth year of a bull market.
Fed policy makers met this week as economic reports indicated the economy is pulling out of a slowdown linked to unusually harsh winter weather. Data this week showed factory production rose in February by the most in six months, a month after snowstorms hampered deliveries of parts and materials.
“Growth in economic activity slowed during the winter months, in part reflecting adverse weather conditions,” the Fed said. Even so, “there is sufficient underlying strength in the broader economy to support ongoing improvement in labor-market conditions,” the central bank said.
Reports on housing, gross domestic product and durable goods are among the economic data due next week.
The Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility, was little changed at 14.41. The index has fallen 19 percent in the past five days.
Six of the 10 main groups in the S&P 500 advanced today, with utilities rallying 1.3 percent to lead gains while health- care, technology and telephone companies declined.
Ann Inc., the owner of the Ann Taylor clothing brand, rose 13 percent to $42.00, the highest since 2006. Golden Gate Capital Corp. took a 9.5 percent stake in the women’s apparel retailer. The private equity firm is now the company’s largest shareholder.
LIN Media shares jumped 23 percent to $26.35, poised for the biggest gain since 2009. Media General rose 3.8 percent to $17.99. Media General will add local TV stations across the U.S. to get better negotiating leverage with advertisers and cable providers.
Darden Restaurants Inc. advanced 2.3 percent to $50.42. The owner of Olive Garden and Red Lobster restaurants reaffirmed its forecast for 2014 profit.
Genco Shipping & Trading Ltd. jumped 20 percent to $1.49 after saying it remains in talks about a potential debt restructuring. The company, which has made an interest payment of $3.1 million, is still in talks with lenders and note holders regarding a potential debt restructuring.
Symantec dropped 13 percent to $18.26. The biggest maker of security software for personal computers fired President and CEO Steve Bennett after less than two years on the job as the company struggles with a shift to mobile devices.
Nike slid 4.1 percent to $76.06 for its biggest slide since June. The world’s largest sporting-goods company signaled that momentum may slow as the strong dollar hampers its performance abroad. The company posted third-quarter profit and sales that topped estimates.
Zions Bancorporation fell 5 percent to $31.34. The Fed said 29 of the 30 largest banks subjected to annual stress tests have sufficient capital to withstand a deep recession while continuing to pay dividends. Zions is the only lender that came in below one of the Fed’s main capital thresholds.
Financial stocks advanced 0.2 percent as a group. All 30 banks, including Zions, exceeded the minimum in a separate scenario of rising interest rates, a sign of improved capital levels in the banking system since the 2008 financial crisis.
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