* Investors unsure of Fed's timing for tapering
* ADP employment report tops expectations
* Both OmniVision and Express shares slide after outlook
* Dow off 0.2 pct, S&P 500 down 0.2 pct, Nasdaq off 0.02 pct
By Ryan Vlastelica
NEW YORK, Dec 4 U.S. stocks declined on
Wednesday, with the S&P 500 off for a fourth straight session as
investors worried that the market's rally to record levels was
not justified, given uncertainty over when the Federal Reserve
will start to slow its stimulus.
The S&P 500 is on track to snap an eight-week winning
streak, when it added nearly 7 percent and hit a series of
record highs. The recent decline came partly on concerns about
an imminent winding down of Fed stimulus.
Many market participants expect the Fed to announce a cut to
its $85 billion in monthly bond purchases in March, but recent
economic data increased expectations that the move may come
sooner. The Fed has said it would slow its stimulus program when
certain economic measures meet its targets, including a decline
in the U.S. unemployment rate.
The November ADP National Employment Report showed
private-sector employers added 215,000 jobs in November, more
than expected. This was the latest in a string of reports
suggesting the economy's outlook was brightening.
"Stronger economics means earlier tapering, which is a
negative for the market. On top of that, we've surged to new
highs with a lot of optimism, and that normally calls for a
pullback, if only briefly," said Bruce McCain, chief investment
strategist at Key Private Bank in Cleveland, Ohio.
"If the decline is mostly about sentiment, we should work
through it quickly and be back to seeing better action," he
added. "But the pullback could be more pronounced, the more
people focus on the Fed."
In the Fed's Beige Book, a collection of anecdotes from the
central bank's business contacts across the nation, the Fed said
employers had stepped up hiring in some parts of the country in
October and early November, and the economy had expanded at a
"modest to moderate pace."
The Dow Jones industrial average was down 29.12
points, or 0.18 percent, at 15,885.50. The Standard & Poor's 500
Index was down 3.03 points, or 0.17 percent, at 1,792.12.
The Nasdaq Composite Index was down just 0.77 of a
point, or 0.02 percent, at 4,036.43.
Other signs of strength in the economy were figures showing
that the U.S. trade deficit narrowed in October and new home
sales recorded their biggest increase in nearly 33-1/2 years in
October. The home sales report suggested that the housing
market's recovery remains intact despite higher mortgage rates.
But the economic picture was muddied after the Institute for
Supply Management said its services index fell to 53.9 last
month from 55.4 in October and below a forecast for 55.0. A
figure above 50 signifies expansion.
U.S. crude oil futures prices advanced for a fourth
straight day, up 1 percent as government data showed an
unexpected drop in U.S. stockpiles. Crude is up 5.1 percent over
the past four sessions.
Shares of Marathon Oil rose 1.2 percent to $36.66.
The stock of Hess Corp added 1 percent to $81.98.
Among decliners, shares of clothing retailer Express Inc
tumbled 22.7 percent to $19.06 after the company
forecast quarterly earnings below analysts' estimates because of
weaker-than-expected Thanksgiving sales.
OmniVision Technologies Inc slid 1.8 percent to
$15.69 after the chipmaker forecast current-quarter revenue well
below analysts' estimates.
Oculus Innovative Sciences Inc shares surged 117.6
percent to $5.07 after the company got the go-ahead from the
U.S. Food and Drug Administration for its anti-scar gel.