* Cantor's primary loss seen as reason for caution
* Bank of America shares biggest drag on S&P 500
* World Bank cuts global 2014 outlook
* Dow down 0.6 pct; S&P 500 down 0.4 pct; Nasdaq off 0.3 pct
(Updates to late afternoon, changes byline)
By Caroline Valetkevitch
NEW YORK, June 11 U.S. stocks dropped on
Wednesday, with the Dow and S&P 500 pulling back from recent
record highs, following the World Bank's reduction of its global
Losses were broad with every sector except energy down for
the day. The S&P 500 was on track for its biggest daily
percentage loss since May 20.
Recent sessions have been marked by low volume and low
volatility, leaving indexes to trade in a narrow range while
still hitting records. The Dow ended at a fourth straight record
high on Tuesday, while the S&P 500 finished lower after four
days of record closing highs.
"It doesn't surprise me to see the markets cool off. It
feels like we're in the middle of the summer where we have a
complacent market with a lot of people on vacation," said Fred
Dickson, chief market strategist at D.A. Davidson & Co in Lake
But he said that could set the market up for bigger moves,
especially with stocks trading near record highs.
A lower World Bank growth forecast gave investors a reason
to sell some stocks. Late Tuesday, the World Bank cut its global
economic growth forecast for 2014 to 2.8 percent from 3.2
percent due to the impact of the Ukraine crisis and a harsh U.S.
Investors viewed the surprising primary election defeat of
Eric Cantor, the No. 2 Republican in the House of
Representatives, by an upstart candidate from the Tea Party
movement as a signal to be cautious.
The biggest drag on the S&P 500 was Bank of America Corp
, which has reached an impasse in negotiating a
multibillion-dollar settlement with the U.S. Department of
Justice relating to the bank's mortgage investments, according
to The New York Times. The bank's stock dropped 2 percent to
The Dow Jones industrial average fell 108.21 points
or 0.64 percent, to 16,837.71. The S&P 500 slipped 7.81
points or 0.40 percent, to 1,942.98. The Nasdaq Composite
dropped 12.24 points or 0.28 percent, to 4,325.75.
The CBOE Volatility Index rose 6.6 percent to 11.71
on Wednesday but remained well below its historical average of
20. In a sign of the market's low volatility, the 14-day Average
True Range on the S&P 500 hit 10.09, the lowest since February
Orexigen Therapeutics Inc shares sank 16.3 percent
to $5.70 after the U.S. Food and Drug Administration delayed a
decision on the marketing application for its obesity drug by
(Additional reporting by Ryan Vlastelica; Editing by Bernadette
Baum, Nick Zieminski and Jan Paschal)