Wall Street slips after S&P 500 hits 4-year high
Stocks fell after the S&P 500 hit its highest level in four years as the benchmark index faced technical resistance and traders cashed in recent gains. The S&P 500 index hit 1,426.68, its highest intraday rise since May 2008. Volume has been light, as expected in August, and only three of the past 12 sessions have seen moves of 0.25 percent or more by the S&P.
"It's not uncommon that you run into some resistance at new highs," said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis. "Traders sort of play for a while to see which way the market is ultimately going to resolve itself."
Stocks rose early in the session and the euro rallied to a seven-week high against the U.S. dollar, bolstered by talk that the European Central Bank will act to lower Spanish and Italian borrowing costs. Bets on action from central banks in support of their stalling economies have helped move stocks higher. However, U.S. stocks lost momentum after the first hour as traders took profits. The slow but steady climb over the past six weeks was partly due to better-than-expected data, including payrolls, retail sales and housing numbers that countered a previous string of disappointments.
"The U.S. economy is showing signs of picking up again," said Wells Capital's Paulsen. Still, he said major indexes will likely stall until the end of the month.
He sees equities "teetering around this high until September, then we decide if the market is indeed making a move higher or if it's going to fail." The Federal Reserve and ECB hold separate policy meetings next month that could decide whether further stimulus to the U.S. recovery and measures to control the euro zone debt crisis are coming.
The Dow Jones industrial average (^DJI) fell 68.06 points, or 0.51 percent, to 13,203.58. The S&P 500 Index (^GSPC) dropped 4.96 points, or 0.35 percent, to 1,413.17. The Nasdaq Composite (^IXIC) lost 8.95 points, or 0.29 percent, to 3,067.26.
The CBOE Volatility Index (^VIX) or VIX, Wall Street's fear barometer, was up 7.4 percent at 15.05 after hitting a fiveyear low of 13.30 last week. Technology stocks were among the day's underperformers.
Facebook Inc (FB.O) director Peter Thiel sold roughly $400 million worth of shares in the online social networking company last week, cashing out most of his stake. The sale comes as Facebook's stock lost 50 percent of its value since its IPO earlier this year. In the session, Facebook shares fell 4.3 percent to $19.16.
Best Buy Co (BBY) shares slightly pared losses after falling to $16.25 to nine-year low. The company suspended its profit outlook and share buybacks for the year. Shares closed down 1.4 percent at $17.91.
Shares of clothing retailer Urban Outfitters (URBN) rose 18.2 percent to $36.98 after several brokerages raised their price targets on the stock.
After the closing bell, shares of Dell Inc (DELL) fell 3.7 percent to $11.88 after the No. 2 U.S. PC maker narrowly missed revenue estimates."