Investors send stocks down after Bernanke comments
NEW YORK — Stocks fell Wednesday, sending the Standard & Poor’s 500 index down for a second session, as a slump in crude oil prices drove energy producers lower and government data showed that orders for durable goods rose less than forecast.
The Morgan Stanley Cyclical index of companies most dependent on economic growth lost 1.6% after Federal Reserve Chairman Ben Bernanke said the recovery isn’t assured.
The S&P 500 retreated 6.98 points, or 0.5%, to 1405.54. While the benchmark gauge for U.S. stocks has lost 0.8% in two days, it rebounded from its intraday low of 1397.20 in the final two hours of trading. The Dow Jones industrial average declined 71.52 points, or 0.5%, to 13,126.21. The Nasdaq composite index lost 15.39 points, or 0.5%, to 3104.96.
“Investor jitters have been heightened by another economic report coming in a bit light and by the Fed chairman suggesting the economy may be vulnerable to another period of turbulence,” says James Paulsen, chief investment strategist at Wells Capital Management. “The sell-off is also being fueled by a collapse in energy stocks. After such a significant advance in the market, investors are already worried about a correction.”
Wednesday’s loss pared this month’s rally in the S&P 500 to 2%. The index is still poised for the best first quarter since 1998, up 12%. Technology and financial shares have risen the most among 10 groups, surging more than 21% in 2012.
Stocks fell Wednesday after a Commerce Department report showed that bookings for goods meant to last at least three years rose 2.2%, less than projected after a revised 3.6% decline the prior month.
Bernanke said unemployment remains too high, the economic recovery isn’t guaranteed and policymakers don’t rule out any further options to boost growth.
“It’s far too early to declare victory,” Bernanke said, according to a transcript of Tuesday night’s interview with ABC News anchor Diane Sawyer. “The recent news has been good. But I think we need to be cautious and make sure this is sustainable. And we haven’t quite yet got to the point where we can be completely confident that we’re on a track to full recovery.”
Highlights:
The market for initial pubic offerings showed more signs of life. Annie’s closed at $39.52, up 89% from its IPO price in the first day of trading. The maker of organic and natural packaged food sold 5 million shares at $19 each, after offering them for $16 to $18.