- POSTED: 12 Jun 2014 04:55
- UPDATED: 12 Jun 2014 05:15
The Dow on Wednesday snapped a four-day streak of record highs in a US equity retreat attributed in part to a shock Republican primary election and profit taking.
NEW YORK: The Dow on Wednesday snapped a four-day streak of record highs in a US equity retreat attributed in part to a shock Republican primary election and profit taking.
The Dow Jones Industrial Average retreated 102.04 points (0.60 per cent) to 16,843.88.
The broad-based S&P 500 fell 6.90 points (0.35 per cent) to 1,943.89, while the tech-rich Nasdaq Composite Index dipped 6.06 points (0.14 per cent) to 4,331.93.
The losses came after the World Bank trimmed its 2014 global growth forecast to 2.8 per cent from its January forecast of 3.2 per cent.
Jack Ablin, chief investment officer at BMO Private Bank, said the World Bank report "sent a sorry signal to investors this morning."
Ablin also cited the unexpected defeat of House Republican Majority Leader Eric Cantor in a Virginia primary battle with Tea Party-backed insurgent David Brat.
Cantor "was one of the biggest friends of Wall Street and the election of somebody openly antagonistic to Wall Street" sparked worries, Ablin said.
Other analysts said the World Bank report and the Cantor loss were less significant factors in the stocks retreat than investor fatigue following the recent rally.
Cantor's defeat is "a convenient excuse to do some profit taking," said Briefing.com analyst Patrick O'Hare.
A profit warning from German airline Deutsche Lufthansa sent US airline shares lower, including American Airlines (-3.1 per cent), Delta Air Lines (-2.9 per cent) and United Continental Holdings (-5.2 per cent). Lufthansa said its bleaker outlook was due to disappointing passenger sales and the impact of strikes, among other factors.
Dow component Boeing fell 2.3 per cent following a downgrade by RBC Capital, which said there is little room for upside following three years of record orders. "Most of the good news for Boeing is already out there" and "this is reflected in the stock," the note said.
Ulta Salon, Cosmetics & Fragrance shot up 13.8 per cent following a strong quarter that included comparable-store sales growth of 8.7 per cent. The company opened 21 new stores during the quarter.
Tech company Synaptics bolted 29.0 per cent higher after bumping up its quarterly revenue guidance from $275-$295 million to $300-310 million. The company also announced the $475 million acquisition of Renesas SP Drivers, which makes components for smartphones and tablets.
Bond prices were unchanged. The yield on the 10-year US Treasury held steady at 2.64 per cent, the same level as Tuesday, while the 30-year was flat at 3.47 per cent. Bond prices and yields move inversely.