U.S.
stocks slipped from their highest levels this year, with declines in
consumer and industrial shares overshadowing gains in health-care
companies, as investors looked for fresh reasons to continue a rally.
The
Standard & Poor’s 500 Index dropped 0.3 percent to 2,066.05 at 4
p.m. in New York, the biggest slide in more than a week while a measure
of investor anxiety rose from the lowest level since August.
The
main U.S. equity benchmark retreated after extending 2016 gains on
Friday, an advance that came amid reports showing the pace of job
creation remained robust and manufacturing activity improved. That
bolstered confidence in the economy, while central banks have signaled
they will continue their efforts to support growth.
Following
Fed Chair Janet Yellen’s reassurance last week that the pace of future
rate increases will be gradual, traders are pricing in zero possibility
of a hike at the end of April, with December now the first month with at
least even odds of higher borrowing costs. A report today showed a
measure of factory orders declined in February, suggesting business
investment will be a drag on growth again in the first quarter. Minutes
from the Fed’s meeting last month are due for release on Wednesday.
Attention
will begin shift more toward corporate earnings, with Alcoa Inc.
unofficially kicking off the reporting season when it releases
first-quarter results on April 11. Analysts estimate profit at S&P
500 firms fell 9.5 percent during the period, compared with forecasts
for flat earnings growth at the beginning of the year. The S&P 500
now trades at its highest valuation since July, based on 12-month
projected earnings.
Source: Bloomberg
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