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US STOCKS-Wall St drops for third day on Fed concerns; focus on IPOs
December 12, 2013 / 3:40 PM / 4 years ago

US STOCKS-Wall St drops for third day on Fed concerns; focus on IPOs

* Hilton Worldwide shares open 6.5 pct above IPO price

* Aramark shares open 1.25 pct above IPO price

* Lululemon warns on Q4 sales, cuts outlook; shares plunge

* Indexes: Dow off 0.5 pct; S&P down 0.2 pct; Nasdaq flat

By Angela Moon

NEW YORK, Dec 12 (Reuters) - U.S. stocks fell for a third day on Thursday amid uncertainty over how soon the Federal Reserve will trim its market-friendly stimulus program.

Concerns about an earlier-than-expected tapering of the Fed’s stimulus have weighed on the market for days, pressuring major U.S. stock indexes to their biggest drop in a month on Wednesday as traders took profit after a provisional budget deal was agreed in Washington.

The central bank’s massive bond-buying program has helped prop up the equity market for much of the year.

“We may be in a little bit of a correction here. Although we know the Fed is going to taper eventually, the unknown factor is by how much or the impact on interest rates, etc. There is short-term fear that all this will come out at the (Federal Open Market Committee) meeting next week,” said Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills in New York.

The Fed’s policymakers are due to meet Dec 17-18.

Much of the day’s focus in early trading was on major initial public offerings, including Hilton Worldwide Holdings Inc. The stock opened at $21.30 on the New York Stock Exchange, 7 percent above its IPO price. The market debut heralded the hotel operator’s return to the public markets some six years after Blackstone Group LP took it private in one of the largest deals of the leveraged-buyout boom.

Shares of food services provider Aramark Holdings Corp rose 3 percent in their market debut, valuing the company at about $4.75 billion. The Philadelphia-based company was returning to the market for the third time, after being taken private first in 1984 and then in 2006.

The Dow Jones industrial average fell 72.57 points, or 0.46 percent, to 15,770.96, the S&P 500 lost 4.03 points, or 0.23 percent, to 1,778.19 and the Nasdaq Composite dropped 1.915 points, or 0.05 percent, to 4,001.898.

Shares of Facebook were also in the spotlight after the social media giant joined the S&P 500. The stock was up 3.3 percent at $51.00.

Lululemon Athletica Inc shares fell more than 10 percent to $61.00 after the company said it expects flat same-store sales in the crucial fourth quarter.

Samsung Electronics Co Ltd lost its bid to ban sales of Apple Inc’s older iPhone and iPad in South Korea after a court dismissed a lawsuit claiming the U.S. firm had infringed on three of Samsung’s mobile patents. Shares of Apple were up 0.34 percent at $563.25.

In economic data, retail sales for November added to signs of a strengthening economy that could draw the U.S. Federal Reserve closer to reducing the pace of its monetary stimulus. But a labor market report showed the number of Americans filing new claims for unemployment benefits jumped last week, reversing the prior three weeks of declines.

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