US stocks fall on first day of 2014

Associated Press
FILE - In this Tuesday, Dec. 31, 2013, file photo, a trader wears glasses celebrating the new year while working on the floor at the New York Stock Exchange in New York. U.S. stock futures are under pressure Jan. 2, 2014, after markets in 2013 saw their biggest gains in nearly two decades. (AP Photo/Seth Wenig, File)

NEW YORK (AP) — Investors may already feel a little nostalgic for 2013.

The Standard & Poor's 500 index began 2014 with a 1 percent decline, its worst performance since Dec. 11, as energy and technology stocks pulled down the market.

KEEPING SCORE: The S&P 500 dropped 15 points, or 0.9 percent, to 1,832. as of 2:45 p.m. Eastern Time. If the index closes at that level it will mark the worst opening day of a year since Jan. 2, 2008, when it slumped 1.4 percent. The Dow Jones industrial average fell 116 points, or 0.7 percent, to 16,459 The Nasdaq composite fell 34 points, or 0.8 percent, to 4,141.

OIL FALL: Energy stocks fell, leading declines for the S&P 500, as the price of oil dropped. Oil fell on expectations of higher global supplies and in response to the strengthening U.S. dollar. Oil slipped $2.88, or 2.9 percent, to $95.51 a barrel.

TECH TROUBLES: Technology stocks lost ground after analysts published gloomy notes on companies in the sector. Analog Devices lost $1.66, or 3.3 percent, to $49.27 after analysts at Goldman Sachs advised its clients to sell the stock, saying it's overvalued compared to its peers. Apple fell $8.68, or 1.5 percent, to $552.41, after Wells Fargo cut its outlook on the stock to "market perform" from "outperform," saying profit margins may come under pressure later this year.

HEAD START ON 2014: Stocks opened the year at lofty heights. The S&P 500 recorded its best year since 1997 last year; The Dow rose the most since 1995. The Nasdaq did far better than the Dow and S&P 500, rising 38.3 percent for the year, its best year since 2009.

THE QUOTE: "The market was grossly overbought and needed to pull back," said Peter Cardillo, chief market economist at Rockwell Global Capital. "The market needed to rest, but fundamentally everything is looking pretty good."

THE ECONOMY: The number of Americans seeking unemployment benefits last week fell by 2,000, extending a recovery in the job market. The Labor Department reported Thursday that the four-week average of claims rose 8,500 to 357,250. The average was driven up by spikes that reflected seasonal volatility around the Thanksgiving and Christmas holidays.

U.S. manufacturing grew at a healthy pace in December as factories stepped up hiring and received more orders, according to a private survey. The Institute for Supply Management, a trade group of purchasing managers, said that its index of manufacturing activity slipped to 57 from 57.3 in November. That's still the second-highest reading in the past 2 ½ years. And any reading above 50 signals growth.

TREASURYS: The yield on the 10-year Treasury note climbed to 2.99 percent from 2.97 percent. The yield on the note is close to its highest since July 2011.

M&M: Macy's and Martha Stewart Living Omnimedia have announced an end to their bitter standoff over a breach-of-contract lawsuit involving J.C. Penney. Stewart's company and Penney signed a merchandising deal in December 2011. That prompted Macy's to sue both companies for violating its exclusive agreement with Martha Stewart. Terms of the settlement are not being released. Macy's fell 27 cents, or 0.5 percent, to $53.13. Martha Stewart Living rose 45 cents, or 10.5 percent, to $4.64.

BACK NEXT WEEK: Many investors are away this week and trading volume is expected to continue to be thin. The weekly unemployment claims numbers released Thursday are getting a lot of attention because the December employment report due out next week.

SO GOES JANUARY: Investors will be hoping that the stock market steadies because the its performance in January often gives an indication of how the rest of the year might turn out. The barometer has proven accurate almost 90 percent of years since 1950, according to the Stock Trader's Almanac.