* Durable goods orders rise more than expected
* P&G shares climb after CEO replacement
* Some retailers' stocks weak after results
* Dow off 0.3 pct, S&P 500 off 0.5 pct, Nasdaq off 0.5 pct
By Leah Schnurr
NEW YORK, May 24 U.S. stocks fell for a third
day on Friday, putting indexes on track for their first negative
week since mid-April, on lingering concern the U.S. central bank
may scale back its support to the economy.
Trading has been choppy in the second half of the week as
market participants assess the Federal Reserve's evolving stance
toward markets. The Fed's stimulus measures have been
instrumental in a rally that has driven U.S. stocks to record
highs this year.
"We've had some volatility this week that we really haven't
experienced in a month or so, so it's got a little bit of
uncertainty here," said Joe Bell, a senior equity analyst at
Schaeffer's Investment Research in Cincinnati.
Friday may also be a natural time for investors to take
profits heading into the long weekend, with markets closed on
Monday for the Memorial Day holiday, Bell said.
Even as there is some fear that the Fed will exit too soon,
many analysts say the eventual tapering of the central bank's
stimulus will come with an expansion of the economy and
corporate earnings, which will continue to support equities.
"A lot of people have only been giving the Fed credit for
this rally and not been talking about some of the improvement in
the labor market or housing data," Bell said.
"The economy in general has been on a lot better footing
than perhaps people have given it credit for."
The Dow Jones industrial average dropped 48.07
points, or 0.31 percent, to 15,246.43. The Standard & Poor's 500
Index dropped 7.91 points, or 0.48 percent, to 1,642.60.
The Nasdaq Composite Index dropped 17.00 points, or 0.49
percent, to 3,442.42.
The three major U.S. stock indexes were on track to post
their first negative week in five.
Procter & Gamble shares rose 3.8 percent to $81.68
after the world's largest household products maker brought back
A.G. Lafley as chief executive Thursday, replacing Bob McDonald
in the midst of a major restructuring.
Abercrombie & Fitch was the S&P 500's biggest loser
after the teen clothing retailer cut its profit forecast and
said quarterly comparable sales fell 15 percent, which it blamed
in part on inventory shortages. Its stock lost 10.7 percent to
Shares of Sears Holdings tumbled 15.8 percent to
$49 after the U.S. retailer reported a bigger-than-expected
quarterly loss on Thursday. Sears said cooler spring weather
hurt its results.
Overall, the U.S. stock market's pullbacks have been short
and shallow since November as traders have taken any weakness as
an opportunity to increase long positions.
Since Wednesday, the markets have been focused on the
possibility that the Fed's $85 billion per month in bond
purchases will be scaled back later this year, in the wake of
recent congressional testimony by Fed Chairman Ben Bernanke and
the minutes from the Federal Open Market Committee's latest
The minutes showed a degree of fracture among the FOMC's
members "in terms of the approach moving forward, specifically
the time frame" of the unwinding of the Fed's stimulus efforts,
said Peter Kenny, chief market strategist at Knight Capital in
Jersey City, New Jersey.
Futures briefly pared losses earlier after the Commerce
Department said durable goods orders rose 3.3 percent last
month, exceeding expectations for an increase of 1.5 percent.
Previous readings for orders were revised to show a smaller
decline in March than previously estimated.