U.S. stocks fall, pulling market further below record highs

NEW YORK - U.S. stocks sank Wednesday, pulling indexes further below record highs hit earlier in the week. The drop was modest but broad: Nine of the 10 sectors in the Standard & Poor's 500 index lost ground.

Given the market's recent run, it's only natural for investors to turn cautious, said Terry Sandven, senior equity strategist at U.S. Bank Wealth Management. On Monday, the S&P 500 reached an all-time high while the Nasdaq crossed the 5,000 mark for the first time in nearly 15 years.

"We're in wait-and-see mode," Sandven said. "Prices are definitely stretched, especially when earnings expectations are being set lower."

The S&P 500 gave up 9.25 points, or 0.44 percent, to 2,098.53.

The Dow Jones industrial average lost 106.47 points, or 0.58 percent, to 18,096.90. The Nasdaq composite fell 12.76 points, or 0.26 percent, to 4,967.14.

With all but 12 big companies in the S&P 500 having turned in their fourth-quarter results, overall earnings are on track to increase 7.7 percent, according to S&P Capital IQ. That's much better than some had thought.

U.S. economic growth appears steady despite reports this week showing declines in construction spending and car sales, according to Jim O'Sullivan, chief U.S. economist at High-Frequency Economics. "We expect another fairly strong rise in payrolls and a drop in the unemployment rate in the February employment report on Friday," O'Sullivan said in a report to clients.

In Europe, both France's CAC-40 index and Germany's DAX gained 1 percent. Britain's FTSE 100 picked up 0.4 percent.

Two reports showed hints of life in Europe's economy. Retail sales increased by 1.1 percent in January, the first time since records began in 2000 that they have grown for four consecutive months. Meanwhile, a key gauge of business activity showed growth in February across all four of the region's biggest economies: Germany, France, Italy, and Spain.

In trading of U.S. government bonds, the yield on the 10-year Treasury note held steady at 2.12 percent.

Most precious and industrial metals traded lower. Gold fell $3.50 to settle at $1,200.90 an ounce, and silver slipped 14 cents to $16.16 an ounce. Copper settled at $2.66 a pound, nearly unchanged.

In oil trading, benchmark U.S. crude rose $1.01 to settle at $51.53 a barrel in New York. Brent crude, the international benchmark, fell 47 cents to $60.55 in London. In other trading on the New York Mercantile Exchange, natural gas rose 5.7 cents to close at $2.77 per 1,000 cubic feet.