U.S. stocks fell Wednesday, sending benchmark indexes down from all-time highs, as investors resumed selling in small-cap and Internet shares.
Groupon Inc. sank 4.4 percent to lead the Dow Jones Internet Index lower by 1.2 percent. Fossil Group Inc. fell 10 percent after the maker of watches and accessories forecast earnings that trailed analysts’ estimates. Deere & Co. slid 2 percent after cutting its full-year revenue projection. International Business Machines Corp. lost 1.8 percent to pace declines among large companies.
The Standard & Poor’s 500 Index dropped 0.5 percent to 1,888.53, ending a three-day rally. The Dow Jones industrial average lost 101.47 points, or 0.6 percent, to 16,613.97, halting five days of gains. The Russell 2000 Index of small stocks sank 1.6 percent after Tuesday sliding 1.1 percent. About 5.4 billion shares changed hands on U.S. exchanges, 19 percent below the three-month average.
“The market is taking a bit of a breather,” said Bill Schultz, chief investment officer who oversees about $1.1 billion at McQueen Ball & Associates in Bethlehem, Pa. “Earnings have been OK, but now we’re in a slow period. We’re going to have to see earnings pick up to get us to the next level on stocks.”
The Russell 2000 has fallen 2.7 percent in the past two days, extending its drop from a March high to 8.7 percent. The gauge retreated 1.9 percent last week to close below its average price for the past 200 days for the first time since 2012. The Dow Jones Internet Index has plunged 17 percent from a 13-year high in March.
“There’s potential for people to take profits as we reach this record-high area,” said Joe Bell, senior equity analyst at Cincinnati-based Schaeffer’s Investment Research Inc. “When you get these run-ups, people start to look at economic data, and we haven’t exactly had a great run over the last month. People were expecting a pickup following a tough winter.”
Data on Wednesday showed wholesale prices in the U.S. rose in April by the most in more than a year, reflecting broad-based gains that signal the threat of deflation is ebbing as the economy improves.
Among the 457 companies in the S&P 500 that have posted results this earnings season, 76 percent beat analysts’ estimates for profits, and 53 percent exceeded sales projections, according to data compiled by Bloomberg.
Investors have also been watching developments in Ukraine, where rebels Tuesday killed seven government soldiers and wounded eight others during an ambush in a breakaway eastern region.
Five of the 10 main S&P 500 groups retreated Wednesday, with consumer-discretionary stocks losing 1.1 percent to pace declines. Phone shares added 0.5 percent.
IBM slid 1.8 percent to $188.72 for the steepest slide in the Dow. Chief Executive Officer Ginni Rometty spoke to Wall Street analysts, saying she remains confident in the company’s 2015 profit forecast despite tumbling sales in hardware and emerging markets like China.
Fossil lost 10 percent to $100 for the biggest drop in the S&P 500. Second-quarter earnings will be 90 cents to 97 cents a share, the company said after the close of trading.