U.S. stocks pullback after the Standard & Poor’s 500 Index skyrocketed to a record yesterday on the Federal Reserve’s decision to decline from trimming down stimulus as investors weighed the latest batch of economic reports. ConAgra Foods Inc. relinquished 4 percent after first-quarter sales missed calculations. Walt Disney Co. gave up 2.1 percent as Morgan Stanley downgraded the shares. Apple Inc. surged 1.6 percent as the iPhone maker rallied for the third consecutive day. Priceline.com Inc., the largest U.S. online travel agency by market worth, closed over $1,000 for the first time. Rite Aid Corp. spiked 23 percent as the drugstore chain increased its profit estimate. FOMC Statement The Federal Open Market Committee said it wants more evidence of an economic recovery before paring its $85 billion-a-month bond-buying program, surprising economists who predicted a reduction in the plan. The Fed has held the main interest rate near zero since December 2008 and pushed its balance sheet to a record $3.66 trillion through three rounds of stimulus, helping send the S&P 500 155 percent higher since March 2009. Relative Strength Ten-year U.S. Treasury yields gained as high as 3.01 percent on Sept. 6 from 1.61 percent on May 1. They tumbled 16 basis points yesterday to 2.69 percent. Home Sales Economic data today showed sales of previously owned U.S. homes unexpectedly rose in August to the topmost level in more than six years as purchasers rushed to lock in interest rates before they rise further. Manufacturing in the Philadelphia region expanded in September at the fastest pace since March 2011, a sign factories are picking up momentum. ‘Just Postponed’ “People had their fun yesterday, but at some point that tapering is going to start,” Gareth Watson, vice president of investment management and research at Richardson GMP Ltd., said in a phone interview from Toronto. His firm oversees C$15 billion ($14.6 billion). “Tapering was just postponed, it wasn’t canceled.” Food Companies Financial and consumer-staples shares had the largest declines among 10 main groups in the S&P 500, losing more than 0.4 percent. Squeezed Margins Banks had the biggest retreat among 24 groups in the S&P 500, falling 1 percent. Zions Bancorporation fell 2.8 percent to $27.96 and KeyCorp retreated 3.9 percent to $11.60. Regional lenders had been rooting for the Fed to let interest rates rise, which would help bring relief to bankers who’ve seen lending margins squeezed and expenses pushed up by new technology and regulations. Apple Bounces Back Technology and industrial shares had the best performance among S&P 500 industries. Apple skyrocketed 1.6 percent to $472.30. The stock has developed 4.9 percent over three days, after an 11 percent skidded since the Sept. 10 introduction of the newest iPhones. ‘Grand Theft’ Take-Two Interactive Software Inc. stepped 1.3 percent up to $17.43. The video game maker said first-day sales of “Grand Theft Auto V” topped $800 million worldwide, surpassing the record set by “Call of Duty: Black Ops II” last November. Groupon Inc. acquired a 9 percent increase to $12.59. The daily deals provider was raised to buy from hold at Stifel Nicolaus & Co. Tesla Motors Inc. logged a 7 percent gain to $177.92. Deutsche Bank analyst Rod Lache said in a note the electric car maker is on track to “modestly” outperform margin expectations for the third quarter and raised his price target to $200 from $160.
