U.S. stocks fell, after the Standard & Poor’s 500 Index yesterday halted a four-day streak of record closes, as the World Bank cut its forecast for global growth.
Bank of America Corp. dropped 1.8 percent after a report said the Justice Department may seek $17 billion to settle probes into mortgage lending. Hilton Worldwide Holdings Inc. slid 2 percent after registering to sell 90 million shares held by Blackstone Group LP. CBS Corp. added 3 percent after saying it will fully divest its 81 percent stake in CBS Outdoor Americas Inc. H&R Block Inc. rose 4.1 percent after reporting sales that topped analysts’ forecasts.
The S&P 500 declined 0.3 percent to 1,944.65 at 9:39 a.m. in New York. The Dow Jones Industrial Average retreated 60.52 points, or 0.4 percent, to 16,885.40, poised to end a five-day rally. Trading in S&P 500 stocks was 30 percent above the 30-day average at this time of day.
“Maybe some market participants are only now waking up to reality after the World Bank report,” Raimund Saxinger, a fund manager at Frankfurt-Trust Investment GmbH, which oversees about $22 billion, said in a phone interview. “Markets have been a little overstretched to the upside, so may have just needed a catalyst to start coming down.”
Investors are also considering the results of yesterday’s primary in Virginia, where U.S. House Majority Leader Eric Cantor lost to a Tea Party-backed candidate. The defeat fueled concern about further gridlock in Washington.
Cantor’s loss could also have long-range market repercussions, as the seven-term House veteran was an ally for Wall Street on issues ranging from the 2008 Troubled Asset Relief Program to defending the Export-Import Bank.
The S&P 500 trades at 16.5 times the projected earnings of its members, up from a multiple of 14.8 -- its lowest valuation this year -- at the beginning of February. The gauge has rallied 7.4 percent since a low on April 11.
The World Bank forecast in a report that the global economy will expand 2.8 percent this year, down from a January projection of 3.2 percent. The lender predicted slower growth for the U.S., China, Russia, India and Brazil. It left the estimate for world growth in 2015 unchanged at 3.4 percent.
The Chicago Board Options Exchange Volatility Index rose 3.9 percent to 11.42. The gauge, known as the VIX, dropped 5.9 percent last week to 10.73, the lowest level since February 2007.
Nine of the 10 main S&P 500 indexes retreated, with financial stocks dropping 0.7 percent to lead losses.
Bank of America dropped 1.8 percent to $15.63. The U.S. Justice Department is seeking about $17 billion from Bank of America Corp. to settle probes into its handling of mortgages ahead of the financial crisis, the New York Times reported.
Hilton fell 2 percent to $22.97. Blackstone is taking advantage of stocks at record highs to start to return money from its largest-ever investment by the amount of equity staked. The world’s largest lodging company by market value has climbed 17 percent since raising $2.35 billion in its Dec. 11 initial public offering.
CBS added 2 percent to $62.35. The owner of the most- watched television network will offer shareholders the option to exchange CBS Class B stock for shares of CBS Outdoor stock at a 7 percent discount.
H&R Block rose 4.1 percent to $32. The biggest U.S. tax preparer said fiscal fourth-quarter profit climbed 35 percent as higher prices for its services and more online business boosted revenue.
Orexigen Therapeutics Inc. dropped 17 percent to $5.65. The biopharmaceutical company said the Food and Drug Administration will take an additional three months to review its new weight- loss drug.
Synaptics Inc. jumped 25 to $83.34 after agreeing to buy Renesas SP Drivers Inc., a maker of chips for smartphones and tablets. The provider of touch-screen technology said it will acquire Renesas within three to four months.
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