NEW YORK – Stocks dipped on Wednesday after strong economic data renewed concerns about rising interest rates and an outlook by consumer products maker Procter & Gamble Co. (PG) missed expectations.
The Dow Jones industrial average was down 16.17 points, or 0.14 percent, to end at 11,400.28. The Standard & Poor's 500 Index was down 5.36 points, or 0.41 percent, at 1,307.85. The Nasdaq Composite Index was down 5.87 points, or 0.25 percent, at 2,303.97.
A 3 percent drop in crude oil prices weighed on shares of major energy companies, including Exxon Mobil Corp. (XOM). A government report showed U.S. gasoline inventories unexpectedly rose last week.
On the economic front, the pace of activity in the vast U.S. service sector accelerated more than expected in April, according to the Institute for Supply Management. In addition, new orders at U.S. factories rose amid strong demand for transportation equipment, electronic products and machinery.
The data added to worries about inflation and rising global interest rates.
"There's no question investors have an eye on interest rates and that interest rates are an issue that creates nervousness among investors," said Hugh Johnson, chief investment officer of Johnson Illington Advisors.
Exxon Mobil was among the biggest drags on the S&P 500 after U.S. crude oil futures for June delivery fell 3 percent, or $2.33, to settle at $72.28 a barrel.
Shares of integrated oil company ConocoPhillips (COP) fell 2.4 percent, or $1.68, to $67.50 on the New York Stock Exchange, while Exxon Mobil shed 1.4 percent, or 90 cents, to $63.77.
The Commerce Department reported that factory orders in March rose a stronger-than-expected 4.2 percent. The ISM's services index rose to 63.0 in April from 60.5 in March, confounding economists' estimates for a slowdown to 59.2.
The price of the benchmark 10-year U.S. Treasury note fell after the economic data, causing its yield, which moves inversely to price, to climb to four-year highs above 5.17 percent, according to Reuters data. Late in the session. the 10-year note's price was down 8/32, while its yield was at 5.15 percent, up from 5.11 percent late Tuesday.
The Federal Reserve is expected to raise interest rates next Wednesday, but the outcome of the Fed's June interest-rate meeting is less certain. Interest-rate futures showed a less than even chance of a June rate increase.
A disappointing forecast by software maker Adobe Inc. (ADBE) added to the weaker tone.
Adobe warned on Tuesday its second-quarter profit and revenue would fall at the low end of a previous forecast due to weakness in Europe and North America. In Wednesday's regular session, Adobe shares fell 8.6 percent, or $3.29, to close at $35.06 on Nasdaq. The stock ranked among the heaviest weights on the Nasdaq 100.
Procter & Gamble shares fell 3.3 percent, or $1.89, to $56.22 on the NYSE after the consumer products maker's revenue missed expectations and it gave a weaker-than-expected fourth-quarter forecast. The stock was the Dow's biggest decliner and among the biggest drags on the S&P 500.
Procter & Gamble's results, however, came at the end of a mostly stronger-than-expected corporate reporting period. More than 70 percent of S&P companies beat estimates, compared with about 66 percent a year ago.
Earnings for S&P 500 companies are forecast to rise 13.5 percent for the first quarter, up from an estimate of 12.5 percent last week, according to Reuters Estimates.
"To some extent, (interest-rate) jitters have been neutralized by ongoing good earnings reports," Johnson said.
Shares of Microsoft Corp. fell 3.5 percent, or 84 cents, to $23.17 on Nasdaq. The software company has held discussions to buy a stake in Internet media company Yahoo Inc. to compete against Google Inc., according to a Wall Street Journal report.
Volume was active on the New York Stock Exchange, where about 1.74 billion shares changed hands, above last year's average daily volume of 1.61 billion. On Nasdaq, about 2.17 billion shares traded, above last year's average daily volume of 1.80 billion shares.
Declining stocks outnumbered advancing ones on the Big Board by a ratio of about 7 to 5. On Nasdaq, things were more evenly matched, with 1,531 stocks declining and 1,501 shares rising.