Wall Street dips as investors pause after rally

NDTV Profit Desk

13 Mar 2013, 08:35 PM IST

Wall Street dips as investors pause after rally

US stocks edged lower on Wednesday as investors paused after a recent rally, despite data showing retail sales rose more than expected in February.

The Commerce Department said retail sales increased 1.1 per cent, the largest rise since September, after a revised 0.2 per cent gain in January.

The Dow had risen for eight straight days to extend its all-time highs on Tuesday while the S&P snapped a seven-session winning streak which had left it within striking distance of its all-time closing high of 1,565.15.

Economists polled by Reuters had expected retail sales, which account for about 30 per cent of consumer spending, to rise 0.5 per cent last month after a previously reported 0.1 per cent gain in January.

The Morgan Stanley retail index gained 0.3 per cent in early trading.

Investors had been looking for signs of any impact on spending triggered by stubbornly high unemployment and a higher payroll tax that went into effect at the start of the year.

"People had been rather concerned about the payroll tax, the sequestration and the uncertainty small businesses are clearly demonstrating about hiring and indeed, even beginning to fire, so the numbers coming through were a pleasant surprise," said Andrew Milligan, head of global strategy at Standard Life Investments in Edinburgh, Scotland.

"But after the run that we have had in equity markets over the last couple of months, it's no surprise that people are looking to take profits on occasion."

The blue-chip index is up 10 per cent for the year and the benchmark S&P index has gained 8.7 per cent.

The Dow Jones industrial average dropped 31.72 points, or 0.22 per cent, to 14,418.34. The Standard & Poor's 500 Index lost 3.03 points, or 0.20 per cent, to 1,549.45. The Nasdaq Composite Index shed 10.03 points, or 0.31 per cent, to 3,232.29.

Other data showed import prices rose more than expected in February, driven by the biggest increase in fuel prices since August, while export prices rose 0.8 per cent for the month, the largest monthly gain since September.

The Commerce Department said on Wednesday inventories increased 1.0 per cent, the largest increase since May 2011, after rising 0.3 per cent in December, suggesting restocking of warehouses will boost economic growth this quarter.

Coach shares rose 1.4 per cent to $49.48 after Citigroup raised its rating on the stock to "buy" from "neutral.

Express Inc slumped 9.5 per cent to $17.05 after the apparel retailer posted fourth-quarter earnings and said it was off to a slow start in the first quarter.

Spectrum Pharmaceuticals shares tumbled 36.5 per cent to $7.90 after the company forecast a steep drop in full-year sales as it expects uptake of its biggest-selling product, colon cancer drug Fusilev, to significantly drop as cheaper generics enter the market.

National Financial Partners shares jumped 15 per cent to $23.05 after three people familiar with the matter said the New York-based wealth management company headed by Sandy Weill's daughter Jessica Bibliowicz, was exploring a potential sale.