Rally ends as Fed chief addresses situation, fuel rises
new york — Stocks fell for the first time in three days on Wednesday after Federal Reserve Chairman Ben Bernanke acknowledged that the nation may be in a recession and higher fuel prices snuffed out a rally in retailers.
Microsoft Corp. and General Electric Co. led technology and industrial shares lower as a reduced growth forecast from the International Monetary Fund also added to concern that the world’s biggest economy is shrinking. Declines in Home Depot Inc. and Sears Holdings Corp. helped chain stores in the Standard & Poor’s 500 index erase most of a 2 percent rally after oil climbed more than $3 a barrel and gasoline rose to a record.
The S&P 500 decreased 2.65 points to 1,367.53. The Dow Jones industrial average lost 45.44 to 12,609.92. The Nasdaq composite index slipped 1.35 to 2,361.4.
GE dropped 41 cents to $38.02. Microsoft declined 34 cents to $29.16.
Home Depot, the biggest home-improvement retailer, retreated 33 cents to $29.16. Sears Holdings, the chain store being reorganized by hedge fund investor Edward Lampert, dropped $1.86 to $107.61.
Crude oil for May delivery rose 3.8 percent to $104.83 a barrel in New York, and gasoline jumped 5.1 percent to $2.7736 a gallon. The dollar fell against the euro for the first time in three days.
Best Buy shares added 47 cents to $43.94.
"Any time you see a retailer that has something good to say, you certainly have to stand up and notice," said Paul Kandel, a New York-based portfolio manager at Sentinel Asset Management, which oversees about $5 billion same day payday loans.
"But I think it’s a little early to draw a trend. The consumers are still struggling. They’re facing high prices at the pump, and the equity in their homes has been evaporating."
Bank of America Corp., the second-biggest U.S. lender by assets, lost 56 cents to $40.30. Wells Fargo & Co., the country’s fifth-largest bank, dropped 96 cents to $30.53.
Bank of New York Mellon Corp. dropped $2.13 to $42. Attorneys representing Russia said there is "consensus building among analysts and legal experts" that Russia’s lawsuit against the largest custodian of financial assets will stand up in courts outside the country. Bank of New York Mellon was accused by Russia’s customs service in May of helping transfer $7 billion out of the country in the 1990s.
The jump in fuel prices, along with gains in copper and gold, pushed energy and raw-materials producers to the top gains among 10 industry groups in the S&P 500. Exxon Mobil Corp., the biggest U.S. oil company, gained $1.50 to $88.52. Chevron, the second-largest, increased 77 cents to $87.51. Newmont Mining Corp., the world’s second-biggest gold producer by volume, added $1.48 to $46.28. Freeport-McMoRan Copper & Gold Inc., the largest publicly traded copper producer, advanced $2.10 to $99.73.