Wall St slides further, uptrend in peril

By Rodrigo Campos

NEW YORK (Reuters) - U.S. stocks fell on Thursday after data showed signs of slower growth ahead for the U.S. economy, with traders zoning in on technicals to anticipate the market's next move.

The S&P 500 briefly traded below its 50-day moving average for the first time this year, an indication that the market's medium-term uptrend could be in peril after this week's strong declines.

The level was also the floor of the trading range during the last month, making 1,543 a key technical support, according to Richard Ross, global technical strategist at Auerbach Grayson in New York.

"A close below 1,540 will generate a 'sell' signal as we transition into this period of weak seasonality," said Ross, noting that the S&P 500 has posted negative second quarters in the last three years. "The 50-day is the key."

 

The Nasdaq 100 and the Russell 2000 indexes have both closed below their 50-day averages this week, adding to the overall technical pressure on the market.

The Dow Jones industrial average fell 52.19 points or 0.36 percent, to 14,566.40. The S&P 500 lost 6.82 points or 0.44 percent, to 1,545.19. The Nasdaq Composite dropped 26.03 points or 0.81 percent, to 3,178.64.

Stocks opened slightly higher but slid after data showed factory activity in the Mid-Atlantic region cooled in April and the index of leading indicators, a gauge of future U.S. economic activity, fell in March for the first time in seven months.

These numbers comprised the latest data to indicate a step-back in the economy as tighter fiscal policy began to weigh.

Equities have been whipsawed in the past three sessions, with a 1 percent move in either direction in the S&P 500 each day this week, the first such streak of volatility for the index since the start of February.

The CBOE Volatility Index or VIX, Wall Street's favorite barometer of investor anxiety, was up 5 percent at midday.

The S&P 500's healthcare sector led the declines, with UnitedHealth Group Inc down 3.8 percent at $59.66 after the insurer lowered its 2013 revenue outlook.

Morgan Stanley reported a stronger-than-expected first-quarter profit but revenue from fixed-income and commodities trading fell sharply from a year earlier, reflecting declines in interest rates and commodity prices. Morgan Stanley's stock lost 4 percent to $20.61.

Verizon Communications and PepsiCo were among the bright spots on the bulls' side, up more than 3 percent each after posting higher than expected earnings. Verizon's stock gained 3.6 percent to $51.31. PepsiCo jumped 3.8 percent to $81.86.

Volume has been heavier on negative days, as many investors have been anticipating a pullback for some time after stocks' strong run to start the year, and are quick to book profits.

S&P 500 earnings are now expected to have risen 1.9 percent in the first quarter, up from the 1.5 percent estimate at the start of the month, based on actual results from 82 companies and estimates for the rest, according to Thomson Reuters data through Thursday morning.

Of the 82 companies that have reported earnings, 72 percent have topped analysts' expectations, but only 43.9 percent have beaten revenue forecasts.

(Editing by Kenneth Barry, Nick Zieminski and Jan Paschal)