U.S. Stocks Decline After Fed Rally as Energy Shares Retreat

(Bloomberg) — U.S. stocks fluctuated, after a rally Wednesday on the Federal Reserve’s policy statement, as gains in technology and health-care shares offset a decline in energy companies.

The Nasdaq Biotechnology Index rose 0.9 percent, while Facebook Inc. and Yahoo! Inc. lifted technology shares. Apple Inc. was little changed in its first day in the Dow Jones Industrial Average. Transocean Ltd. and Chesapeake Energy Corp. dropped more than 3.1 percent to pace declines in energy stocks after the group posted their best gain in a month yesterday.

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The Standard & Poor’s 500 Index slipped 0.2 percent to 2,095.08 at 10:30 a.m. in New York. The Dow declined 67.32, or 0.4 percent, to 18,008.87 after rising 1.3 percent Wednesday. The Nasdaq Composite Index added 0.2 percent, approaching the 5,000 level again.

“Yellen’s comments indicate that a future interest-rate increase is data dependent, and the economic data has actually been bad,” said John Plassard, vice president at Mirabaud Securities LLP in Geneva. “Still, the dollar is going higher and there will be lots of volatility in the next weeks related to that. During March, you still haven’t had two positive equity days in a row.”

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The dollar rebounded from its biggest drop versus the euro in six years. The Bloomberg Dollar Spot Index, a gauge of the currency’s performance against 10 major peers, gained 1.3 percent, halting a three-day drop.

The S&P 500 climbed 1.2 percent yesterday after the Fed said data suggest economic growth has moderated. The central bank said higher interest rates in April are unlikely and it won’t tighten until it is “reasonably confident” inflation will return to its target and the labor market improves further.

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While the Fed dropped an assurance it will be “patient” in raising rates, the word’s removal doesn’t mean it will be impatient, Chair Janet Yellen said in a press conference.

Apple, Dow

The U.S. benchmark gauge had rebounded 2.9 percent through Wednesday from a low on March 11. It fell 3.6 percent in the seven sessions following a record on March 2 amid concern a surging U.S. dollar will hurt corporate earnings and as oil slid more than 12 percent.

“We had a big rally yesterday and there’s a tiny bit of profit-taking here,” Andrew Wilkinson, chief market analyst at Interactive Brokers LLC in Greenwich, Connecticut, said by phone.

Apple Inc. enters the today with the fifth highest weighting in the index at 4.7 percent. The company accounts for 15 percent of the Nasdaq 100 Index and 4 percent of the S&P 500.

Investors will weigh economic reports today to gauge the strength of the U.S. recovery. Jobless claims rose by 1,000 to 291,000 in the seven days ended March 14, from a revised 290,000 in the prior period, a Labor Department report showed Thursday in Washington. The median forecast of 51 economists surveyed by Bloomberg called for 293,000.

Philadelphia Fed’s factory index for March declined more than economists forecast. A Conference Board index of leading indicators, a measure of the outlook for the next three to six months, climbed 0.2 percent in February, following a similar rise in January.

To contact the reporters on this story: Inyoung Hwang in London at ihwang7@bloomberg.net; Callie Bost in New York at cbost2@bloomberg.net

To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net John Shipman, Namitha Jagadeesh

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