U.S. Stocks Slide Amid Small-Cap Selloff; Treasuries Rise
By Joseph Ciolli, Susanne Walker and Callie Bost May 15, 2014 11:38 AM ET
U.S. stocks fell, sending the Russell 2000 Index (RTY) down more than 10 percent from its high, as data showed an unexpected drop in industrial production and Wal-Mart Stores Inc. slid. Treasuries climbed while oil declined.
The Standard & Poor’s 500 Index slipped 1.1 percent at 11:35 a.m. in New York. The Russell 2000 of small companies sank 1.6 percent, bringing its slide from a March high to more than 10 percent, the common definition of a correction. The Stoxx Europe 600 Index retreated 1 percent, erasing gains for the week. The yield on 30-year Treasuries dropped six basis points to 3.31 percent, the lowest level since June. The euro was little changed at $1.3726 after erasing earlier losses. Oil fell 0.7 percent and nickel slid 6.3 percent.
Industrial production in the U.S. unexpectedly declined in April while the cost of living rose by the most in almost a year and U.S. jobless claims fell last week. Federal Reserve Chair Janet Yellen will speak after saying last week the U.S. economy still needs support. Wal-Mart fell 2 percent after it forecast profit that missed estimates. Euro-area policy makers are prepared to add more monetary stimulus if needed, European Central Bank Vice President Vitor Constancio said in Berlin.
“The primary sentiment right now is cautious and nervous,” Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said in a phone interview. “It’s more a matter of capital preservation than it is trying to generate returns. This is a time of caution. More people are looking to make sales and raise cash than they are to put cash to work on the weakness.”
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