NEW YORK — Wall Street’s recent passion for high-dividend stocks is fading.
The stock market closed lower Wednesday, led by the same industry groups that had the biggest gains early in the year: rich dividend payers such as power utilities and makers of consumer staples.
Rising bond yields have been an important factor behind that shift.
The yield on the 10-year Treasury note is near the highest it has been in 13 months after a sharp increase Tuesday. That’s giving investors who want steady income an alternative to dividend-rich stocks such as power utilities, consumer staples makers and phone companies. Investors piled into those stocks at the beginning of the year, when bond yields were close to historic lows.
More broadly, after this year’s powerful bull run — the Dow Jones industrial average is up 16.8 percent, the Standard & Poor’s 500 index 15.6 percent — investors may be running out of reasons to keep plowing money into the stock market.
“There’s a vacuum of catalysts to continue to push (stocks) higher,” said Sam Stovall, chief U.S. equity strategist for S&P Capital IQ. Now, he said, investors are wondering: “Well, should I take some profits and sit on the sidelines and then get back in?”
Stovall noted that S&P 500 has had a temporary pullback of at least 5 percent every year since the end of the World War II. That hasn’t happened yet in 2013.
The Dow closed down 106.59 points at 15,302.80, a loss of 0.7 percent. That decline matched its advance the day before, when it closed at a record high, the ninth time it has done so this month.
The S&P 500 index was down 11.70 points to 1,648.36, also 0.7 percent. The Nasdaq composite lost 21.37 points to 3,467.52, or 0.6 percent.
The S&P 500 is headed for a seventh consecutive month of increases, the longest winning streak since 2009.
The Dow is on track to end higher for a sixth straight month.
