By CHRIS DIETERICHUpdated May 16, 2013, 5:20 p.m. ET
Article from http://online.wsj.com/article/
Stocks fell from all-time highs amid concerns the Federal Reserve might tap the brakes on its efforts to stimulate growth.
The Dow Jones Industrial Average declined 42.47 points, or 0.3%, to 15233.22, while the Standard & Poor's 500-stock index fell 8.31 points, or 0.5%, to 1650.47. The S&P 500 had ended at records in nine of the past 10 sessions and snapped a four-session streak of gains. The Nasdaq Composite Index dropped 6.37 points, or 0.2%, to 3465.24.
Stocks dipped to the day's lows after Federal Reserve Bank of San Francisco President John Williams said in the text of a prepared speech that he is open to trimming the central bank's bond-buying program in coming months if the economy continues to improve.
Despite Thursday's weak economic news, his comments "raise the specter of the Fed tapering, and that is proving to be the big bogeyman out there," said Steve Sosnick, equity-risk manager at Timber Hill, the market-making unit of Interactive Brokers Group.
Initial claims for jobless benefits rose more than forecast last week, the biggest one-week increase since November. Housing starts for April declined far worse than expected, and the Federal Reserve Bank of Philadelphia's May index of business activity unexpectedly fell.
April's consumer-price index, a reading on inflation, fell 0.4% on the month, more than forecast.
The disappointing reports, paired with tame inflation, had bolstered conviction that the Fed would stick to its $85 billion monthly purchases in Treasury and mortgage debt to support the economy. Prices for Treasurys rose, as the yield on the 10-year note fell to 1.865%.
"What people have been oscillating back and forth with is whether the Fed will reduce [its bond buying] sooner rather than later. That's what the market is playing around with," said George Rusnak, head of fixed income for Wells Fargo Private Bank, which oversees $170 billion in assets.
In corporate news, Cisco Systems CSCO +11.21% jumped $2.68, or 13%, to $23.89, a 2½-year high. The blue-chip network-equipment maker reported quarterly earnings and revenue that topped analyst expectations, and projected growth in revenue and profit in the current quarter.
Wal-Mart WMT -1.70% Stores slid 1.36, or 1.7%, 78.50, weighing on the Dow, after the world's largest retailer reported quarterly earnings that fell shy of forecasts and provided a downbeat second-quarter outlook.
In Asia, Japan's gross domestic product, the prime measure of economic growth, expanded 3.5%, more than expected. Japan's Nikkei Stock Average rose to 5½-year highs in intraday trading but closed down 0.4%. China's Shanghai Composite Index rallied 1.2%.
In Europe, the Stoxx Europe 600 fell less than 0.1%, its first loss in three days. Data showed the euro zone's trade surplus in March rose to the highest level since the inception of the common currency in 1999. Germany's DAX index rose 0.1% to close at a record.
The dollar advanced against the euro and yen. Gold slumped 0.7%, to settle at $1,387.10 a troy ounce. Crude oil gained 0.9%, to settle at $95.16 a barrel.
In corporate news, Berkshire Hathaway's BRKB -1.09% Class-B shares slipped 1.23, or 1.1%, to 111.54, after Standard & Poor's Ratings Services cut the conglomerate's rating by one notch, citing the company's dependence on its core insurance operations for most of its dividend income.
Tesla TSLA +8.73% rose 7.41, or 8.7%, to 92.25, after the car maker said it plans to sell stock and convertible notes to repay debt and for corporate purposes, taking advantage of a recent rally in its stock price.
Kohl's KSS +4.73% climbed 2.35, or 4.7%, to 52.03, after the retailer's earnings beat the company's estimates and provided current-quarter earnings roughly in line with expectations.
Write to Chris Dieterich at chris.dieterich@dowjones.com
A version of this article appeared May 17, 2013, on page C4 in the U.S. edition of The Wall Street Journal, with the headline: Shares Decline on Worries Fed Will Hit Brakes.