By msnbc.com news services
U.S. stocks fell on Wednesday as weaker-than-expected data on durable goods orders and a drop in oil prices prompted selling in energy and materials shares.
The S&P energy sector index was off 1.7 percent and the materials sector index fell 1.8 percent. All 10 S&P 500 sectors were down.
The Dow Jones industrial average closed the day down about 72 points, having fallen as much as 128 points earlier in the session.
U.S. crude oil futures fell to about $105 a barrel after a French newspaper reported several governments, including the United States, were considering the release of oil reserves to ease high prices -- seen as an obstacle to an economic recovery.
Investor anxiety has been rising due to the prolonged and significant rally, and we had a catalyst event in the collapse of energy stocks," said Jim Paulsen, chief investment officer at Wells Capital Management.
"It's a combination of investor jitters, given how far the rally has come, and technical levels that we are testing, seeing if the rally can hold up."
He said holding the 1,400 level on the S&P 500 was an indication the market's uptrend was still in place.
New orders for U.S. manufactured goods rose less than expected in February and a gauge of future business investment also missed forecasts, casting a shadow on the manufacturing sector's support of the recovery.
"While today's data fell a bit short, it was still OK. But the market has raised the bar on economic numbers, which is positive because we are starting to see improvement in the sentiment," said Mike Shea, managing partner and trader at Direct Access Partners in New York.
Analysts see limited upside in the S&P 500 after gains of more than 12 percent this year. The benchmark index is on track for its best quarter since the third quarter of 2009.
Large-cap shares, many already at 52-week highs, could continue to outperform as money managers dress up their portfolios ahead of the quarter-end on Friday.
Much of the market's recent gains have come after accommodative monetary policies by central banks globally, including the U.S. Federal Reserve.
On Tuesday, Fed Chairman Ben Bernanke, asked in an ABC News interview about the potential for more quantitative easing, said the Fed wasn't taking any options off the table.
Shares of Annie's Inc surged after the organic food maker's initial public offering priced shares at $19, above its expected range.
Apple Inc will offer buyers of its new iPad in Australia a refund after it was accused of misleading advertising.
Reuters contributed to this report.
Source: http://bottomline.msnbc.msn.com/_news/2012/03/28/10907233-energy-company-shares-lead-stocks-lower
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