A sharp fall in US crude oil futures hit energy stocks, prompted by talk of a release of some US and European strategic oil reserves. Materials shares dropped as well.
A weaker-than-expected report on US durable goods orders deflated some of the recent investor optimism over the economy, leading to softness in industrial shares. Analysts also said quarter-end stock buying, which lifted stocks earlier this week and caused a number of top performers to hit new 52-week highs, may be waning.
Window dressing at the “end of quarter has probably driven up stock prices over the last couple of days,” said Robbert Van Batenburg, head of equity research at Louis Capital in New York.
Caterpillar, down 3.5 per cent at $104.26, was the biggest drag on the Dow. Major oil companies Exxon Mobil, down 0.9 per cent at $85.86, and Chevron, down 1.1 per cent at $105.89, also weighed heavily on the blue-chip average.
The S&P 500 materials sector index, down 1.5 per cent, led the broad market’s decline. All S&P 500 sectors were lower, except for financials.
Despite the decline, the S&P 500’s ability to hold the 1,400 level was an indication that the market’s uptrend was still in place, said Jim Paulsen, chief investment officer at Wells Capital Management.
The Dow Jones industrial average fell 71.52 points, or 0.54 per cent, to 13,126.21 at the close. The Standard & Poor’s 500 Index slipped 6.98 points, or 0.49 per cent, to 1,405.54. The Nasdaq Composite Index declined 15.39 points, or 0.49 per cent, to 3,104.96.