NEW YORK — U.S. stocks sank Wednesday, pulling indexes farther below record highs hit during the week. The drop was modest but broad: Nine of the 10 sectors in the Standard & Poor’s 500 index lost ground.
Given the market’s recent run, it’s only natural for investors to turn cautious, said Terry Sandven, senior equity strategist at U.S. Bank Wealth Management. On Monday, the S&P 500 reached an all-time high, and the Nasdaq crossed the 5,000 mark for the first time in nearly 15 years.
“We’re in wait-and-see mode,” Sandven said. “Prices are definitely stretched, especially when earnings expectations are being set lower.”
The S&P 500 gave up 9.25 points, or 0.4 percent, to 2,098.53.
The Dow Jones industrial average lost 106.47 points, or 0.6 percent, to 18,096.90. The Nasdaq composite fell 12.76 points, or 0.3 percent, to 4,967.14.
Alcoa’s stock sank 4 percent after news that analysts at Bank of America cut their ratings on the aluminum giant. BofA’s analysts expect prices for aluminum to lose strength as China increases its exports. Alcoa lost 59 cents to $14.59.
With all but 12 big companies in the S&P 500 having turned in their fourth-quarter results, overall earnings are on track to increase 7.7 percent, according to S&P Capital IQ. That’s much better than some had feared.
Forecasts for the first three months, however, have been slashed. In early December, analysts projected an 8.6 percent increase in corporate earnings for the first quarter. Today, they expect them to shrink 2.6 percent.
ADP, a payroll processing company, reported Wednesday that businesses added more than 200,000 people to their payrolls in February.
The survey came two days before the government’s release of its monthly employment report Friday. Economists forecast that the economy added 240,000 jobs last month and the unemployment rate slipped to 5.6 percent from 5.7 percent.
U.S. economic growth appears steady despite reports this week showing declines in construction spending and car sales, according to Jim O’Sullivan, chief U.S. economist at High-Frequency Economics. “We expect another fairly strong rise in payrolls and a drop in the unemployment rate in the February employment report on Friday,” he said in a report to clients.
