The Standard & Poor’s 500 Index halted a five-day rally, while small-cap shares rose to the highest level since July, as gains among phone and consumer stocks offset losses in utilities and growing concern over slowing growth in Europe.
Exelon Corp. led utility shares to the biggest drop since June as the U.S. and China agreed on new carbon cuts to fight climate change. Bank shares slumped 0.5 percent after regulators in Europe and the U.S. fined six lenders to settle a probe into the rigging of foreign-exchange benchmarks. Verizon Communications Inc. and AT&T Inc. climbed at least 0.9 percent. Macy’s Inc. added 5.1 percent after posting a gain in profit last quarter.
The S&P 500 lost 0.1 percent to 2,038.25 at 4 p.m. in New York, trimming an earlier drop of 0.4 percent. The Dow Jones Industrial Average declined 2.7 points, or less than 0.1 percent, to 17,612.20. Both gauges closed at all-time highs yesterday. About 5.9 billion shares traded hands today, 8.7 percent below the three-month average.
The Nasdaq Composite Index gained 0.3 percent to the highest since March 2000, while the Russell 2000 Index of small companies added 0.6 percent to cap a six-day rally, its longest since June. The Chicago Board Options Exchange Volatility index, the gauge of options prices known as the VIX, added 0.8 percent to 13.02.
“There was some nervousness at first out of Europe but as often is the case some of that’s fading as European markets close and we don’t see any real earnings blowups or economic data that’s hurt the market,” Steve Bombardiere, an equity trader at Conifer Securities LLC in New York, said by phone. “As it happens very often, we see a dip and people buy in, there’s still some fear in the market that if you don’t buy in, you’re left watching.”
The S&P 500 had gained for five straight sessions, bringing its advance from a six-month low in October to 9.5 percent, as better-than-estimated corporate earnings and economic data boosted confidence the U.S. economy is weathering a global slowdown. The Dow’s decline today halted a six-day streak.
The broader index fell as much as 9.8 percent from a September record on increasing signs that European growth was slowing at the same time the Federal Reserve was ending its monthly bond purchases.
Concerns that European struggles may weigh on the U.S. economy were stoked today after Bank of England Governor Mark Carney unveiled lower U.K. growth and inflation forecasts as officials adjusted to account for “moribund” global expansion and stagnation in Europe.
“Europe is doing everything it can to rev up their economies but the problem with Europe is it’s so fractured that you can’t get them to work together,” Joe Franklin, president of Franklin Wealth Management in Hixson, Tennessee. “The main issue is these countries need to work together.
European Central Bank President Mario Draghi’s move to quantitative easing has met resistance from German Chancellor Angela Merkel, who has advocated fiscal discipline across the euro area. Last week, Draghi stoked investor speculation that he’ll intensify stimulus for the euro area after indicating he has the backing of policy makers to do so.
Investors are also watching developments in Ukraine, where the country’s defense minister said the military should prepare for clashes, as growing tensions in the nation’s eastern combat zone threatened to boil over into open conflict.
The Stoxx Europe 600 Index sank 1.1 percent today.
Data in the U.S. today showed September wholesale inventories increased faster than estimated.
Six of the 10 main S&P 500 groups advanced today, with phone shares rising 0.8 percent to pace gains.
Utilities sank 2 percent to lead declines, with Exelon sliding 3.5 percent to $35.93. The group has rallied 19 percent this year, the second-most in the index.
President Barack Obama pledged deeper U.S. cuts in greenhouse-gas emissions and China will for the first time set a target for capping carbon emissions. Electricity generation is responsible for about a third of U.S. greenhouse gas emissions by economic sector, according to the U.S. Environmental Protection Agency.
Citigroup declined 0.7 percent to $53.42 and JPMorgan Chase & Co. slipped 1.3 percent to $60.56 after regulators fined them about $1 billion each. Bank of America dropped 0.2 percent to $17.29.
Banks and individuals could still face further penalties and litigation following the 13-month probe into allegations dealers at the biggest banks colluded with counterparts at other firms to rig benchmarks used by fund managers to determine what they pay for foreign currency.
JM Smucker dropped 3.5 percent to $100.38. The seller of peanut butter to coffee and pickles cut its forecast for adjusted earnings in its current fiscal year.
Retailers of consumer durables and apparel gained 1.1 percent amid corporate earnings results. Macy’s jumped 5.1 percent to $61.57 after posting a 23 percent gain in net income last quarter.
Fossil Group Inc. jumped 8.4 percent to $112.48 for the biggest gain in the S&P 500. The company announced a $1-billion share repurchase plan. The watchmaker posted third-quarter earnings of $1.96 a share, exceeding the average analyst projection of $1.82.
Susquehanna Bancshares Inc. rallied 33 percent to $13.12. BB&T, North Carolina’s second-largest bank, agreed to buy the lender for a premium of about 39 percent over yesterday’s closing price. BB&T Corp. slipped 1.7 percent to $37.67.
ADT Corp. jumped 3.1 percent to $36.77. The electronic security service company reported third-quarter earnings and revenue that beat analysts’ estimates.