NEW YORK: Stocks retreated Thursday, giving benchmark indexes their first back-to-back drops in one month, as a contraction in China manufacturing offset American housing data and investors weighed Federal Reserve stimulus comments.
Sempra Energy and Ralph Lauren Corp. slipped at least 2.3 percent after their forecasts missed analysts’ estimates. Ford Motor Co. retreated 1.1 percent after saying it will stop making cars in Australia in October 2016. Hewlett-Packard Co. surged 17 percent after the computer maker’s forecast for fiscal third-quarter profit exceeded estimates.
The S&P 500 index fell 0.3 percent to 1,650.51 after tumbling as much as 1.2 percent earlier in the day. The Dow Jones industrial average lost 12.67 points, or 0.1 percent, to 15,294.50.
“The market is struggling with conflicting language from Fed officials as to the timing of potential tapering of asset purchases, slowing growth in China and after Japan’s decline in equities,” Ryan Larson, the Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc., said in an interview. “We’re seeing modest profit taking in the U.S. as a result.”
Stocks fell Wednesday after Fed Chairman Ben S. Bernanke said that the flow of asset purchases could be reduced “in the next few meetings” if economic conditions improve. Fed Bank of St. Louis President James Bullard said in London on Thursday he’s concerned about inflation and that he’d like to continue the current pace of bond purchases to stimulate the economy.
In China, the preliminary reading for a Purchasing Managers’ Index of manufacturing was 49.6 in May, according to data released by HSBC Holdings Plc and Markit Economics. That missed the average forecast of economists calling for a reading of 50.4 and compared with a final 50.4 for April. Results below 50 signal contraction.
U.S. equities pared declines after data showed builders sold more U.S. new homes than projected in April. A separate report showed fewer Americans than forecast filed applications for unemployment benefits last week, a sign that the job market is sustaining recent gains.
Nine out of the 10 S&P 500 industry groups declined as utility, financial and consumer-staples companies slumped more than 0.4 percent.
Sempra Energy declined 2.7 percent to $79.47. The San Diego-based power producer projected 2014 earnings that were lower than expectations. Utility companies in the S&P 500 have dropped 2.4 percent as a group in the past two days.
Ralph Lauren slid 2.3 percent to $183.69. The retailer of its namesake brand clothing forecast sales in the current fiscal year to rise 4 to 7 percent.