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Business

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Associated Press
Stocks opened lower on Wall Street as the market comes off of its biggest annual gain in nearly two decades.

S&P 500 starts new year with downturn

– Investors may already feel a little nostalgic for 2013.

The Standard & Poor’s 500 index began the New Year with its worst performance in three weeks as energy and technology companies pulled down the stock market.

Stocks started the year at lofty heights after a combination of rising company earnings and economic stimulus from the Federal Reserve pushed major indexes to record levels in 2013. The S&P 500 surged almost 30 percent, its best year since 1997, and the Dow Jones industrial average climbed 26.5 percent, the most since 1995.

“The market was grossly overbought and needed to pull back,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “But fundamentally everything is looking pretty good.”

The S&P 500 dropped 16.38 points, or 0.9 percent, to 1,831.98, its worst start to a year’s trading since Jan. 2, 2008, when the index slumped 1.4 percent.

The Dow fell 135.31 points, or 0.8 percent, to 16,441.35. The Nasdaq composite slid 33.52 points, or 0.8 percent, to 4,143.07.

Energy stocks fell as the price of oil dropped $2.98, or 3 percent, to $95.44 a barrel. Oil slumped after reports that an end to protests at a major Libyan oil field could return 300,000 barrels of daily production to the global market. Technology stocks lost ground after analysts published gloomy notes on companies in the sector. Analog Devices lost $1.65, or 3.2 percent, to $49.28 after analysts at Goldman Sachs advised its clients to sell the chipmaker’s stock, saying it’s overvalued compared to its peers.

Apple fell $7.89, or 1.4 percent, to $553.13, after Wells Fargo cut its outlook on the stock to “market perform” from “outperform,” saying profit margins may come under pressure later this year.

Some analysts said investors shouldn’t read too much into the lackluster start to the year because trading volumes were below normal as the holiday season wound down with many market participants still away from their desks.

“I don’t think we can really start counting till Monday,” said Dan Morris, Global Investment Strategist at TIAA-CREF. “A lot of people are still on holiday.”

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