Tags: stocks | Investors | Focus | Fed

Stocks Retreat as Investors Focus on Fed

Tuesday, 10 December 2013 05:32 PM

U.S. stocks slipped on Tuesday, a day after a record close on the S&P 500, with traders looking ahead to next week's Federal Reserve meeting in the absence of market-moving economic data.

Healthcare stocks were among the most active after company news, while utilities was the worst performer of the 10 industry groups on the S&P 500.

The S&P 500 held above key technical indicators including its 14-day moving average, and volume remained below average even for a thinly-traded month.

"It's a bit of consolidation after a run-up to new highs. There's no reason to think this is anything different than that," said Paul Zemsky, head of asset allocation at ING Investment Management in New York.

A number of Fed policymakers suggested on Monday the U.S. central bank may be closer than previously thought to trimming its $85 billion a month in bond purchases. But stronger economic data of late, including a drop in the unemployment rate to a five-year low, helped ease investors' angst over a pullback in the Fed's stimulus.

"Monetary policy responds to changes in the economy and as long as the economy is better, tapering shouldn't be too difficult to endure," said Kevin Caron, market strategist at Stifel, Nicolaus & Co. in Florham Park, New Jersey.

The Fed's policy-setting Federal Open Market Committee meets Tuesday and Wednesday next week.

The Dow Jones industrial average fell 52.4 points or 0.33 percent, to 15,973.13, the S&P 500 lost 5.75 points or 0.32 percent, to 1,802.62 and the Nasdaq Composite dropped 8.261 points or 0.2 percent, to 4,060.49.

Twitter hit an all-time high of $52.58, more than doubling its $26 initial price in early November and extending Monday's gains after a spate of product announcements that could boost its revenues. Shares closed up 5.8 percent at $51.99.

Other Internet stocks also performed well on Tuesday with Facebook up 2.9 percent to $50.25 and Yahoo up 3.5 percent to $40.22.

AbbVie shares hit a record high of $54.11 after its all-oral hepatitis C therapy cured 96 percent of difficult-to-treat patients in a late-stage clinical trial, keeping the company well placed in a highly competitive race to deliver new treatments for the serious liver disease. Shares ended up 1.8 percent at $52.14.

Also in the healthcare orbit, pharmacy chain CVS Caremark and pharmaceutical distributor Cardinal Health announced a 10-year agreement to form the largest generic drug operation in the United States, the world's biggest generic drug market.

Cardinal Health closed up 3 percent at $66.22 and CVS added 1.9 percent to $67.99.

Shares of Rambus Inc. jumped 12.3 percent to $9.58 after the company settled a patent dispute with Micron Technology.

General Motors Co. stock fell 1.2 percent to $40.40. The automaker said Chief Executive Dan Akerson will step down next month and be replaced by Mary Barra, the company's global product development chief.

About 5.8 billion shares changed hands on U.S. exchanges, below the 6.1 billion average so far this month, according to data from BATS Global Markets.

Advancers trailed decliners on the New York Stock Exchange by about 2 to 3, while on Nasdaq almost two issues fell for every one that rose.

© 2018 Thomson/Reuters. All rights reserved.

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U.S. stocks slipped on Tuesday, a day after a record close on the S P 500, with traders looking ahead to next week's Federal Reserve meeting in the absence of market-moving economic data.
Tuesday, 10 December 2013 05:32 PM
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