Stocks fall back from record levels

Published on NewsOK Modified: May 14, 2014 at 3:56 pm •  Published: May 14, 2014

NEW YORK (AP) — Stocks fell back from record levels on Wednesday as investors decided it was better to play it safe.

A day after the Standard & Poor's 500 index climbed above 1,900 for the first time, investors turned their backs on stocks that would benefit more than others in a reviving economy. Consumer discretionary stocks, a group that includes luxury retailers and entertainment companies, dropped the most. Industrial and technology companies also fell, and riskier, small-company stocks resumed a sell-off after rebounding on Monday.

Instead, investors bought safe and steady stocks. Utility and telecom stocks, which investors favor when the markets get choppy, rose the most in the S&P 500. U.S. government bonds also rallied, pushing the yield on the 10-year Treasury note to its lowest in more than six months, another sign that investors were favoring safer assets.

"There's some internal self-correction and rotation going on beneath the surface," said Jim Russell, a regional investment director at US Bank. Russell said stocks were getting closer to being fairly valued.

The Standard & Poor's 500 index fell 8.92 points, or 0.5 percent, to 1,888.53. The Dow Jones industrial average dropped 101.47 points, or 0.6 percent, to 16,613. The Nasdaq composite fell 29.54 points, or 0.7 percent, to 4,100.63.

The Russell 2000 index, a gauge of small-company stocks, fell 18.02 points, or 1.6 percent, to 1,103.14. The index has slumped 9 percent since peaking March 4 as investors sold riskier stocks.

Bonds benefited from investor's appetite for less risky assets.

The yield on the 10-year Treasury note, which falls when the price of the bond rises, dropped to the lowest it's been since October. The yield declined to 2.54 percent from 2.61 percent late Tuesday.

"People are rotating out of equities and into bonds," said Mark Pibl, U.S. fixed income strategists at Canaccord Genuity, a wealth manager, of Wednesday's move in the bond market.

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