Equities following fundamental data?

U.S. stocks declined, sending equities to a second day of losses after reaching all-time highs, as data showed home prices rose at a slower pace than forecast and investors watched developments in Iraq.

The Standard & Poor’s 500 Index (CME:SPM14) slid 0.2% to 1,959.10 at 9:31 a.m. in New York. The Dow Jones Industrial Average fell 27.39 points, or 0.2%, to 16,909.87.

“With the market close to all-time highs, it’s getting harder and harder to move higher, and investors will want to lock in some profits now,” said Heinz-Gerd Sonnenschein, a strategist at Deutsche Postbank AG in Bonn, Germany. “It makes sense to take a breather with high valuations, tension in Iraq, and people still waiting to see whether economic growth and U.S. companies have recovered from a weak first quarter. There may be a bit more nervousness, but markets have been quite stable and volatility remains very low.”

The equity benchmark gauge slipped less than 0.1% yesterday, halting the six-day rally that pushed it to a record last week. The index trades at 16.6 times the projected earnings of its members, close to its highest valuation in four years.

The U.S. equities market is experiencing its smallest swings of the year. The S&P 500 moved 0.25 percentage point from its highest and lowest points yesterday. That followed a swing of 0.24 point on June 20, the narrowest movement in more than 20 years besides a 0.20 point reading in December.

The Chicago Board Options Exchange Volatility Index, or VIX, a measure of S&P 500 options prices, closed at 10.98 yesterday, near its lowest level since 2007.

Data Watch

Data today showed home prices in 20 U.S. cities rose at a slower pace than forecast in the year ended in April. The S&P/Case-Shiller index of property values increased 10.8% from April 2013, the smallest 12-month gain in more than a year, after rising 12.4% in March.

A report yesterday indicated sales of previously owned homes climbed last month the most since October, while prices increased at the slowest pace in more than two years.

Data at 10 a.m. in New York may show confidence among U.S. consumers climbed in June to near its highest level since 2008. The Conference Board index probably climbed to 83.5 from 83 in May, according to the median estimate in a Bloomberg News survey of economists. Commerce Department data at the same time will probably show that new-home sales rose in May, projections show.

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