S&P 500 starts 2014 with two-day decline
NEW YORK -- After last year’s big party in the stock market, 2014 is starting off with a nagging hangover.
The Standard & Poor’s 500 index edged a fraction of a point lower on Friday, beginning a year with a two-day losing streak for the first time since 2005.
While few analysts expect 2014 to produce gains comparable to last year’s advance of nearly 30 percent, many see a moderate increase as the economy continues to improve and investors move funds out of bonds and into stocks, which are generating much bigger returns for investors.
"The market is trying to find some direction here," said Scott Wren, a senior equity strategist at Wells Fargo Advisors. "We’re in for a few days of trying to figure out whether we inch a little higher or see some down days."
The S&P 500 index fell 0.61 points, or 0.03 percent, to 1,831.37 and was 0.5 percent lower for the week.
The Dow Jones industrial average gained 28.64 points, or 0.2 percent, to 16,469.99. The Nasdaq composite fell 11.16 points, or 0.3 percent, to 4,131.91.
General Motors was among the stocks that posted the biggest losses in the S&P 500. The automaker fell $1.38, or 3.4 percent, to $39.57 after reporting a U.S. sale slump of more than 6 percent in December.
Energy companies have also started the year with declines as the price of oil falls.
On Friday, oil extended a weeklong skid by falling $1.48, or 1.6 percent, to $93.96 a barrel. A strengthening U.S. economy drove the dollar higher, which hurts oil, and signs emerged of ample supply worldwide.
Federal Reserve Chairman Ben Bernanke on Friday predicted stronger growth in 2014 and said that factors that have kept the economy from accelerating appear to be abating.
"The combination of financial healing, greater balance in the housing market, less fiscal restraint, and, of course, continued monetary accommodation bodes well for U.S. economic growth in coming quarters," Bernanke said in comments to the annual meeting of the American Economic Association in Philadelphia.
The encouraging economic backdrop is one reason for investors to remain positive about stocks, despite the slow start to the year, said Bill Barker, a senior portfolio analyst at Motley Fool Funds, which manages about $600 million in stock mutual funds.
"As long as there is no inflation and a good economy, with low interest rates ... that’s the kind of thing that stocks love," Barker said.