Market retreats after seven up sessions; miners lead decline

By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks slipped on Thursday, ending seven straight days of gains by the S&P 500 index as a drop in precious metal prices dragged mining shares lower.

Spot gold fell 2.6 percent to $1,331 an ounce as tensions with Syria eased and on worries the Federal Reserve will begin to scale back its monetary stimulus when it meets on Tuesday and Wednesday. Spot silver fell 5 percent to $21.99 an ounce.

Economic data showed first-time weekly claims for state unemployment benefits, the last major reading on the labor market before the Fed's meeting, fell to the lowest level since 2006, but the picture was incomplete because two states did not process all their claims.

"We're seeing some modest profit-taking," including in basic materials stocks, said Michael Sheldon, market strategist at RDM Financial, in Westport, Connecticut.

The materials sector <.SPLRCM> fell 1 percent, with gold miner Newmont Mining off 4.2 percent at $28.23.

The Dow Jones industrial average <.DJI> was down 25.96 points, or 0.17 percent, at 15,300.64. The Standard & Poor's 500 Index <.SPX> was down 5.71 points, or 0.34 percent, at 1,683.42. The Nasdaq Composite Index <.IXIC> was down 9.04 points, or 0.24 percent, at 3,715.97.

The S&P 500 had risen about 3.4 percent over the prior seven sessions, its longest winning streak in two months, as concerns about a Western military strike against Syria faded.

U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov discussed a Russian plan under which Damascus would give up its arsenal of poison gas and avert a U.S. military strike.

"Gold is a fear factor commodity, and so hope of a resolution (in Syria) is causing prices to go down a little bit," said Bryant Evans, portfolio manager at Cozad Asset Management, in Champaign, Illinois.

Some of the focus has shifted to next week's Fed meeting and a news conference, when a decision is expected about whether to cut its $85 billion-a-month purchases of Treasury and mortgage bonds to bolster the economy.

Economists at a majority of U.S. primary dealers expect the Fed to announce it will cut its bond purchases, according to a recent Reuters poll.

But such a move would also indicate the Fed sees the economy in better shape than many think.

Lululemon Athletica Inc slumped 5.4 percent to $65.29 after the apparel retailer reported second-quarter results and trimmed its outlook.

Shares of Disney gained 2.4 percent to $65.49 after the media giant said it will increase its share buybacks.

Also on the up side were shares of NetSol Technologies Inc , which jumped 9.5 percent to $11.17 after the software maker reported fourth-quarter earnings.

Shares of real estate investment trusts also declined following recent gains in Treasury yields. An index of REITs <.STCGUSRE> was down 0.8 percent.

Volume was roughly 4.8 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, well below the average daily closing volume of about 6.3 billion this year.

Decliners beat advancers on the NYSE by more than 2 to 1 while on the Nasdaq decliners beat advancers by about 1.8 to 1.

ANOTHER INDEX SHUFFLE

A day after announcing its largest change to the Dow Jones industrials in nearly a decade, S&P Dow Jones Indices announced late Wednesday that Vertex Pharmaceuticals Inc and Ametek Inc will replace Advanced Micro Devices Inc and SAIC Inc in the S&P 500 after the close of trading on September 20.

Vertex shares gained 2 percent to $81.40 and Ametek rose 2.6 percent to $45.57. AMD fell 1.8 percent to $3.75 and SAIC edged up 1.3 percent to $14.96. Shares of Advanced Micro Devices were down 1.8 percent at $3.75.

(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama, Kenneth Barry and Nick Zieminski)

See all articles from Reuters
Loading...

Friend's Activity