U.S. Stocks Fall For Second Straight Session

By Saumya Vaishampayan 

U.S. stocks fell Wednesday for the second session in a row, sending the S&P 500 index to its lowest level in nearly two weeks.

Stocks pared losses in early afternoon trade. The S&P 500 declined eight points, or 0.4%, to 2099, its lowest level since Feb. 19. The index had fallen as much as 20 points earlier.

The Dow Jones Industrial Average fell 81 points, or 0.5%, to 18123. The Nasdaq Composite slipped 10 points, or 0.2%, to 4970.

Traders said there was no sense of panic among investors selling stocks Wednesday. Declines were broad-based, with nearly all S&P 500 sectors in negative territory. Telecommunications stocks in the S&P 500 fell the most, down 1%, while health-care stocks were the sole gainers, up 0.3%.

"Health care...has really been a sector for all seasons," said Eric Wiegand, senior portfolio manager at U.S. Bank Wealth Management, which has $126 billion under management. "The underlying demand trends we find very attractive and favorable," he said, referring to the aging population in many developed countries that will lift demand for health-care services.

The Dow and S&P have retreated from all-time highs hit Monday. "The markets have a tendency to...pull back modestly when record high levels are hit," said Randy Frederick, managing director of trading and derivatives at Charles Schwab.

The six-year bull market in U.S. stocks has been driven by an improving economy, rising corporate profit and low interest rates. For much of the recovery, investors flocked to safer parts of the stock market, such as utilities stocks, which pay out large dividends, said Eddie Perkin, who oversees about $35 billion as chief equity investment officer at Eaton Vance Management. That tide is starting to shift, with utilities stocks posting the biggest sector declines this year.

Mr. Perkin said he favors stocks in the technology and health-care sectors, which he characterizes as defensive growth stocks. Those stocks have benefited from a wave of merger activity, which he said could continue.

Investors are looking ahead to Friday's jobs report. Economists surveyed by The Wall Street Journal expect the Labor Department to report Friday the U.S. economy added 240,000 jobs in February. Strong economic data tend to heighten speculation about when the Federal Reserve could raise short-term rates.

U.S. private payrolls increased by 212,000 in February, according to Wednesday's national employment report compiled by payroll processor Automatic Data Processing Inc. and forecasting firm Moody's Analytics. Economists surveyed by The Wall Street Journal had expected payrolls to increase by 215,000.

In European stock markets, France's CAC 40 and Germany's DAX both advanced 1%. Investors are looking ahead to a Thursday meeting of the European Central Bank, which could provide details on how it will execute its bond-buying program. The euro hit an 11-year low against the U.S. dollar, recently trading at $1.1073.

In other markets, gold futures fell 0.3% to $1200.90 an ounce. Crude-oil futures slipped 0.2% to $50.40 a barrel.

Treasury prices were little changed, with the 10-year yield trading at 2.125% versus 2.122% on Tuesday. Yields rise as prices fall.

Among individual stocks, Abercrombie & Fitch Co. posted a worse-than-expected 14% drop in sales in its latest quarter. Shares slid 13%.

Exxon Mobil Corp. announced plans to cut capital spending by 12% this year to $34 billion. Shares fell 0.1%.

Write to Saumya Vaishampayan at [e-mail]

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