By Rita Nazareth March 12 (Bloomberg) — U.S. stocks drifted between gains and losses a day after the Standard & Poor’s 500 Index closed at a 17-month high as a drop in consumer confidence overshadowed an unexpected increase in retail sales Declines in Bank of America Corp. and Walt Disney Co. dragged on the Dow Jones Industrial Average as the decrease in the Reuters/ University of Michigan preliminary consumer sentiment index signaled continuing concern over the job market. Pfizer Inc. slid 1.2 percent after its drug failed to halt the progression of advanced breast tumors. Supervalu Inc. surged 5.9 percent on takeover speculation. “It looks like confidence is beginning to wane,” said Michael Mullaney , who manages $9 billion at Fiduciary Trust Co. in Boston. “Confidence is going to suffer until we get real improvement on the jobs front. In addition, the stock market is a little bit extended right now. It wouldn’t surprise me if we get a minor pullback from here.” The S&P 500 fell 0.1 percent to 1,149.05 at 3:39 p.m. in New York. The Dow rose 5.98 points, or less than 0.1 percent, to 10,617.82. Both gauges retreated at least 0.2 percent earlier. U.S. stocks rose for a third day yesterday, sending the S&P 500 Index to the highest level since October 2008, as Citigroup Inc. led a rally in bank shares. The S&P 500 closed at a 15-month high of 1,150.23 on Jan. 19, and then plunged 8.1 percent through Feb. 8 on concern that European nations including Greece will fail to pay back debt and speculation that the Fed will need to rein in emergency stimulus measures as the economy improves. The index has since erased that loss to extend its rebound since March 9, 2009, to 70 percent through yesterday. ‘Half Full’ “The glass may be half full, but people are not quite certain they can hold on to the glass,” said Jason Pride , director of investment strategy at Glenmede in Philadelphia, which manages $18 billion. “The market is jittery. Every little piece of news will make people nervous or happy. On top of that, the excess debt situation throughout the developed markets is a big headwind. That will keep economic growth at a subpar level.” Health-care stocks had the second-biggest decline among 10 groups in the S&P 500, dropping 0.5 percent collectively. Pfizer retreated 1.2 percent to $17.09. The world’s largest drugmaker said the cancer drug Sutent failed to halt the progression of advanced breast tumors in two studies. The company also stopped a trial of an experimental medicine to treat lung malignancy. Abbott, Citigroup Abbott Laboratories fell 2.2 percent to $54.31. The maker of the arthritis medicine Humira was cut to “sell” from “hold” at Citigroup Inc., which said the company may face “underlying profitability trouble” this year. Citigroup Inc. fell for the first time in nine days after Oppenheimer & Co. said the stock is fairly valued and under a “cloud” as long as the U.S. government remains a major shareholder. Citigroup dropped 4.4 percent to $4, after yesterday rising to the highest since November. Financial shares in the S&P 500 retreated for the first time in 11 sessions, snapping the group’s longest winning streak since at least 1989. United Technologies Corp. slipped 0.9 percent to $71.40. The maker of Pratt & Whitney jet engines said it expects 2010 earnings per share of $4.40 to $4.65. The average estimate of analysts surveyed by Bloomberg was $4.64 a share. Schwab, Pall Charles Schwab Corp. sank 3.3 percent to $18.48 after saying it expects first-quarter earnings to be as much as 4 cents a share lower than its fourth-quarter results. Fourth-quarter net income was 14 cents. The average estimate of analysts surveyed by Bloomberg was for a first-quarter profit of 15 cents a share. Pall Corp. slumped 4.8 percent to $38.88. The producer of filters for drugmakers and refineries forecast 2010 earnings excluding some items of $2.05 a share at most. On average, the analysts surveyed by Bloomberg estimated profit of $2.07. CF Industries Holdings Inc. lost 3.5 percent to $97.14 after Agrium Inc. said it will let its $5.43 billion offer for the fertilizer producer expire and won’t try to elect nominees to CF’s board. Separately, Yara International ASA declined to raise its $4.1 billion offer for Terra Industries Inc. , leaving the way open for rival suitor CF Industries. Terra said March 10 it favored a $4.71 billion offer from CF Industries and planned to terminate an earlier agreement with Yara unless the Norwegian company counterbid. Terra’s shares fell 1.3 percent to $46.30. Small Caps Shares of smaller companies underperformed today, with the S&P 600 Smallcap index and the Russell 2000 Index slumping at least 0.4 percent. Bets against smaller U.S. stocks have reached the highest level in seven months as traders speculate the group’s record valuation will lead to declines. Investors boosted bearish bets in 2010 even as the shares rallied on signs the U.S. economy is strengthening. More than 8 percent of shares among companies in the Russell 2000 Index have been sold short, the highest level in at least a year. Benchmark indexes advanced at the start of trading after the Commerce Department said purchases at U.S. retailers increased 0.3 percent last month, compared with a 0.2 percent drop forecast in a Bloomberg survey of economists. ‘Grinding Slog’ “While I don’t have any reason to think the 2010 equity market will be as strong as 2009 was, you can probably have a reasonably close to average year,” said Stephen Wood , who helps manage $176 billion as chief market strategist for Russell Investments in New York. “There’s going to be a measureable, discernable upward bias. It’s going to be a grinding slog, but the equity market will be up higher a year from now than it is today.” A gauge of S&P 500 retailers advanced 0.6 percent. Sears Holdings Corp. and Macy’s Inc , the largest U.S. department-store companies, gained at least 1.5 percent. Makers of construction machinery rallied after Komatsu Ltd. of Japan, the world’s second-largest seller of large dump trucks and excavators, said it expects sales in China to increase 40 percent to 50 percent in the year starting April 1. Caterpillar Inc. , the world’s largest maker of bulldozers, gained 2.6 percent to $60.40, the most in the Dow Jones Industrial Average. Paccar Inc., a maker of Kenworth, Peterbilt and DAF trucks, rose 4.6 percent to $41.62, the highest since September 2008. Monsanto Co. rose 1.3 percent to $72.54. The company, facing antitrust probes into its genetically modified seeds, may benefit from previous court rulings in which intellectual property rights trumped competition concerns, according to antitrust lawyers. Supervalu Inc. surged 4 percent to $17.05 on speculation the second-largest grocery chain will be acquired. RF Micro Devices Inc. advanced 4 percent to $4.92. The maker of semiconductor products rose after it was picked by CNBC’s “Mad Money” television show host Jim Cramer on potential growth and market-share gains. To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net .
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Most U.S. Stocks Fall on Drop in Consumer Confidence; Citigroup Retreats
