U.S. Stocks Trim Quarterly Gain as Health-Care, Industrials Fall

The Worst 2015 First-Quarter S&P 500 Performers

U.S. stocks declined amid a retreat among health-care and industrial companies, trimming a ninth straight quarterly advance for the Standard & Poor’s 500 Index.

The Nasdaq Biotechnology Index slipped 2.2 percent, paring its best quarterly gain since 2013. Caterpillar Inc. and Boeing Co. fell at least 1.6 percent. Charter Communications Inc. climbed 5.3 percent after agreeing to buy a majority stake in Bright House Networks for $10.4 billion.

The S&P 500 lost 0.9 percent to 2,067.89 at 4 p.m. in New York, while marking its longest quarterly winning streak since 1998. The Dow Jones Industrial Average fell 200.19 points, or 1.1 percent, to 17,776.12. The Nasdaq Composite Index, down 0.9 percent Tuesday, posted its longest quarterly winning streak ever.

“It’s been a very mixed quarter as we’ve had a directionless market,” David Lafferty, chief market strategist at Natixis Global Asset Management in Boston, where he helps oversee about $900 billion, said by phone. “The market seems to be stuck in a bunch of unknowns. Earnings growth forecasts have really been marked down because of the dollar and oil and the market is struggling to reach new highs.”

The S&P 500 clung to a 0.4 percent gain to maintain its quarterly winning streak. The gauge is still down 2.3 percent from a record on March 2 and among the worst performers in 24 developed markets this year.

Quarterly Gains

Three rounds of Federal Reserve stimulus have helped the S&P 500 more than triple from a low in March 2009. The index is trading near its highest valuation in more than five years, according to data compiled by Bloomberg.

The U.S. equities benchmark stumbled out of the gates in 2015, sinking 3.1 percent in January for its worst month in a year, as concern mounted that slowing growth overseas will hurt the economy at the same time plunging crude and a stronger dollar showed signs of eroding corporate profits.

The gauge rebounded in February amid a rally in global equities, as the ECB unveiled plans for additional stimulus and Fed Chair Janet Yellen said inflation and wage growth remain too low for higher borrowing costs any time soon.

Biotech Streak

The Chicago Board Options Exchange Volatility Index rose 5.4 percent to 15.29. The gauge, know as the VIX, posted its biggest quarterly decline in two years, down 20 percent. The S&P 500 swung an average of 1.1 percent between its low of the day and its high in the first quarter, the widest daily moves since the second quarter of 2012, according to data compiled by Bloomberg.

Financial stocks are down 2.5 percent this year and posted their worst quarterly drop since 2012’s second quarter. American Express Co. tumbled 16 percent, while Discover Financial Services and Bank of America Corp. fell almost 14 percent this quarter.

Utilities Lag

Energy companies dropped for three consecutive quarters, the longest stretch since the first quarter of 2009, paced by declines of more than 20 percent in Transocean Ltd., Diamond Offshore Drilling Inc. and Chesapeake Energy Corp. West Texas Intermediate crude is down 11 percent since December.

Utilities, the best-performing S&P 500 industry in 2014, is off to the worst start this year. The group is down 6 percent after rising 24 percent last year, marking its biggest quarterly drop in six years.

The Nasdaq Composite rose 3.5 percent this quarter for its ninth straight quarterly gain, boosted by biotech stocks. The Nasdaq Biotechnology Index rallied 13 percent and also posted a nine-quarter winning streak, its longest since 2000, as Biogen Inc. rose 24 percent and Regeneron Pharmaceuticals Inc. added 10 percent.

Investors are analyzing more economic data this week for clues on the timing of an interest-rate increase. Federal Reserve Chair Janet Yellen has said interest rates will probably rise this year, with subsequent increases taking place gradually.

Economic Data

Richmond Fed President Jeffrey Lacker said Tuesday the main interest rate should be raised in June amid a stronger job market, consumer-spending growth and inflation heading back toward the Fed’s target.

Data Tuesday showed consumer confidence increased in March to the second-highest level since August 2007. A separate report said home prices in 20 U.S. cities appreciated at a faster pace in the year ended in January, indicating the residential real-estate market continues to firm. A manufacturing report revealed activity in the Chicago area shrank in March for a second month.

Earnings Loom

Alcoa Inc. unofficially kicks off the earnings season when it reports results on April 8. Analysts estimate first-quarter profits for S&P 500 companies will decline for the first time since 2009. They were projecting a growth in earnings for the period as recently as January.

“Earnings expectations are taking stage now and are going to move to the front page,” Tom Wright, the New York-based director of equities at JMP Securities LLC, said by phone. “On top of oil, the dollar and rate concerns, you have legitimate earnings expectations concerns.”

All ten of the S&P 500’s main groups retreated Tuesday, led by industrial and health-care companies. About 6.3 billion shares traded hands, about 8 percent lower than the three-month average.

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