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US: Wall St edges lower ahead of Fed, Facebook tumbles
[NEW YORK] US stocks fell in a broad decline on Wednesday, with material shares leading the market lower as investors looked ahead to a statement from the US Federal Reserve as it winds down its economic stimulus programme.
Strength in energy shares helped to offset some of the weakness in materials, though the tech-heavy Nasdaq was pressured by a slump in Facebook as investors fretted over its spending plans.
DuPont lost 1.4 per cent to US$67.03 and was the largest drag on the S&P materials sector after it said there were "competitive advantages" in keeping its businesses together. Activist investor Nelson Peltz has urged DuPont to separate its various businesses in a move that has supported the company's shares.
Equities mostly held on to recent gains, with the S&P 500 up 6.3 per cent in the last nine sessions as earnings have mostly been strong. So far this reporting season, 75.3 per cent of S&P 500 companies have exceeded profit expectations, according to Thomson Reuters data, above the long-term average of 63 percent. "The trend today is company-specific," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
She said the takeaway from a glut of company calls is "the US is the best house in an ugly neighborhood and that doesn't seem to be abating." Energy shares climbed 0.6 per cent as the top-performing sector of the day by far, tracking a 1.4 per cent increase in crude oil, which was boosted as US crude stockpiles rose by less than expected last week.
At 1:06 pm EDT (1706 GMT) the Dow Jones industrial average fell 19.05 points, or 0.11 percent, to 16,986.7, the S&P 500 lost 3.48 points, or 0.18 per cent, to 1,981.57 and the Nasdaq Composite dropped 24.54 points, or 0.54 per cent, to 4,539.76.
The Fed is seen likely to announce that it will no longer add to its holdings of Treasury bonds and mortgage-backed securities after it ends a two-day policy meeting later on Wednesday, effectively ending a program that at its peak pumped US$85 billion a month into the financial system.
Facebook Inc fell 6.1 per cent to US$75.84 the day after the social network announced an increase in spending in 2015 and projected a slowdown in revenue growth this quarter.
Shares of both Orbital Sciences Corp and Alliant Techsystems were halted in afternoon trading, with Orbital last trading down 15.7 per cent to US$25.60 and Alliant last down 5.2 per cent to US$123.
The halt and decline came a day after Orbital's unmanned rocket exploded seconds after liftoff from a commercial launch pad in Virginia, marking the first accident since NASA turned to private operators to deliver cargo to the International Space Station. Orbital is in the midst of merging with Alliant's aerospace and defense division.