Jan. 6 (Bloomberg) -- U.S. stocks fell for a third day, the longest stretch of declines to start a year for the Standard & Poor’s 500 Index since 2005, after slower-than-forecast growth in service industries.
Twitter Inc. fell 3.9 percent after Morgan Stanley said investors should sell the shares because the microblogging service may lose online advertising revenue to larger rivals like Facebook Inc. Whole Foods Market Inc. fell 3.5 percent after an analyst report cited risks from increased competition. Verizon Communications Inc. climbed 0.6 percent after T-Mobile US Inc. agreed to buy airwaves from Verizon Wireless for about $2.4 billion. Financial shares in the S&P 500 added 0.2 percent, the second-biggest gain among the 10 main industries.
The S&P 500 slid 0.3 percent to 1,826.77 at 4 p.m. in New York. The Dow Jones Industrial Average lost 44.89 points, or 0.3 percent, to 16,425.10. About 6.5 billion shares changed hands on U.S. exchanges, about 9 percent above the three-month average, according to data compiled by Bloomberg.
“Today is just noise back and forth, up a little down a little,” Donald Selkin, who helps manage about $4 billion as the New York-based chief market strategist at National Securities Corp., said by phone. “I think we’re just going to go sideways until we see the Fed’s minutes and the jobs report on Friday.”
The ADP Research Institute reports the change in companies’ payrolls on Wednesday and minutes from the Fed’s Dec. 17 to 18 meeting will be released the same day. The Labor Department will provide the unemployment rate and new hiring figures for last month on Friday.
Stocks trimmed losses earlier after Blackstone Group LP’s Byron Wien forecast U.S. economic growth of more than 3 percent for 2014. Wien, vice chairman of Blackstone’s advisory services unit, said in his annual “10 Surprises” list that economic growth will top 3 percent this year. He predicted the S&P 500 will advance about 20 percent in 2014 after a sharp correction.
“It’s a relatively quiet news day, so a relatively bullish forecast by a respected strategist didn’t hurt at all today, and may have helped,” Richard Sichel, chief investment officer at Philadelphia Trust Co., said in a telephone interview. He helps oversee $1.9 billion. “There’s still good values out there. With reasonable price-earnings ratios, we think that people should be investing.”
The gauge has declined in each of the year’s first three trading sessions, losing 1.2 percent, for the first time since 2005, according to data compiled by Bloomberg. The S&P 500 slid 2.3 percent in the first three days of 2005, and recovered to gain 3 percent for the year.
Before this year, the S&P 500 had fallen each of the first three trading days of the year seven times since data on the index began in 1928. It posted an annual gain in six of those seven years, according to the data.
The Institute for Supply Management’s non-manufacturing index decreased to 53 in December from 53.9 in the prior month, a report from the Tempe, Arizona-based group showed today. The median projection in a Bloomberg survey of 69 economists was 54.7. Estimates ranged from 53 to 57.7.
Twitter dropped 3.9 percent to $66.29. Morgan Stanley lowered its rating on the social-networking company to underweight, or sell, from equal weight, or hold.
“Twitter stock is trading above our $61 bull case and appears to price in an approximate tripling of Twitter’s share of the socially enabled ad market within three years,” the brokerage wrote in a report to investors. “In our view, success is far from guaranteed at this early stage.”
The company’s shares have more than doubled since their market debut in November.
Whole Foods lost 3.5 percent to $54.30. Longbow Research LLC analyst Philip Terpolilli said in a report that the company’s profit margin may fall as it increases discounts amid higher competition.
EBay Inc. slid 2.8 percent to $51.78. Morgan Stanley cut the online auction company to equalweight from overweight.
First Solar Inc. lost 9.7 percent to $51.26 for the biggest drop in the S&P 500. Goldman Sachs Group Inc. analyst Brian Lee cut the stock to sell from buy, saying the company’s valuation may contract as earnings decline.
Verizon, the largest U.S. wireless carrier, gained 0.6 percent to $48.69. T-Mobile agreed to buy airwaves from Verizon Wireless for about $2.4 billion in cash as part of a spectrum swap that will give both companies more network capacity in areas where they need it. T-Mobile, the fourth-largest U.S. wireless carrier, advanced 3.7 percent to $33.48.
Boston Scientific Corp. climbed 3.4 percent to $12.33. Morgan Stanley raised the maker of the Watchman heart implant to overweight, or buy, from equal weight, or hold. The brokerage said the company’s sales will improve in 2014 and future years, while the shares may reach $15 apiece.
Valuations in the S&P 500 increased by the most since the financial crisis last year as 460 stocks rose, more than any year since at least 1990. Neither are reasons to bet against equities now.
While Wall Street strategists are the most cautious in almost a decade after the broadest U.S. rally on record sent price-earnings ratios up 19 percent, expanding multiples have preceded advances twice as often as they have retreats, data compiled by Bloomberg show. Since 1936, the S&P 500 has risen 69 percent of the time following quarters when valuations widened, the data show. The average return is 14 percent in years after more than 400 constituents climbed, according to data compiled by Strategas Research Partners.
“One sign that things are becoming more popular is they’re more expensive,” Michael Shaoul, the chief executive officer of Marketfield Asset Management LLC, which oversees about $19 billion, said in a Jan. 2 interview in New York. “I would be quite surprised if this bull market didn’t continue for another two to three years.”
Markets for stocks, currencies, bonds and commodities are the calmest in at least 12 years amid investor confidence that central bank stimulus is spurring economic growth.
Expectations for price swings have fallen to the lowest on record for 29 assets, including U.S. equities, interest rates, the euro and oil, based on data since 2002 compiled by New York-based hedge fund Lake Hill Capital Management LLC. The implied volatility, a gauge of options prices, for the markets reached an average of 15.3 on Nov. 22, compared with an all-time high of 44.2 in 2008, data on two-month exchange-traded contracts show.