Nov. 3 (Bloomberg) -- U.S. stocks declined as the Federal Reserve debated additional economic-stimulus measures, while election victories for the Republican Party gave it control of the House of Representatives.
BlackRock Inc. slumped 4 percent after saying that Bank of America Corp. and PNC Financial Services Group Inc., two of its biggest shareholders, plan to sell their stock. EOG Resources Inc. tumbled 12 percent after an analyst said the company cut production growth estimates. Hartford Financial Services Group Inc. climbed 8.2 percent after lifting its earnings estimate this year.
The Standard & Poor’s 500 Index fell 0.4 percent to 1,188.44 as of 12:07 p.m. in New York. The Dow Jones Industrial Average dropped 37.05 points, or 0.3 percent, to 11,151.67.
“People are hedging a little bit ahead of the Fed’s announcement,” said Mark Bronzo, a money manager in Irvington, New York, at Security Global Investors, which oversees $21 billion. “The results of the elections came in as expected. So that could be a buy on the rumor, sell on the news situation.”
The S&P 500 surged 17 percent since July 2 through yesterday as odds increased that Republicans would take control of the House. The GOP, while falling short of winning the Senate, narrowed the chamber’s Democratic majority in an election shaped by voter anxiety over jobs and the economy.
60-Seat Gain
Republicans gained at least 60 House seats yesterday across the country, capitalizing on concern that government spending has increased over the last two years and delivering a rebuke to the domestic agenda of President Barack Obama.
The S&P 500 may rally as much as 16 percent in the next six months because the election will stymie legislative initiatives in Congress, billionaire investor Kenneth Fisher said.
“Markets don’t like big sweeping actions,” said Fisher, who oversees more than $38 billion at Woodside, California-based Fisher Investments Inc. “Right now, every politician is chirping and burping and carrying on. It’s been in the interest of the Republicans running for office to talk down the economy. That goes away immediately after the election. Come June, you’ll see how quiet the political landscape will be -- very little legislation and a lot of baby kissing.”
The S&P 500 has climbed to a six-month high this week as investors speculated that the Fed will announce plans to buy at least $500 billion in securities to stimulate growth through a technique known as quantitative easing.
‘Baked In’
“A lot of this has been baked into the market,” said Todd M. Morgan, chairman of Bel Air Investment Advisors LLC in Los Angeles, which manages $5 billion. “It be would healthy if we had a rest in the next six days, but I like the market over the next six months.”
Companies in the U.S. boosted payrolls by 43,000 in October, which was more than forecast, according to figures from ADP Employer Services. The median estimate of 38 economists surveyed by Bloomberg News called for a 20,000 gain. Forecasts ranged from a decline of 10,000 to a 50,000 increase.
The Institute for Supply Management said its index of non- manufacturing businesses, which covers about 90 percent of the economy, rose to 54.3 in October from 53.2 a month earlier. The median forecast of 76 economists surveyed by Bloomberg News projected the ISM index would rise to 53.5. Estimates ranged from 52 to 55.2.
BlackRock, EOG
BlackRock fell 4 percent to $166.08. Bank of America, based in Charlotte, North Carolina, will offer 34.5 million common shares through a secondary sale, BlackRock said today in a statement. Pittsburgh-based PNC will sell as many as 7.5 million common shares. BlackRock will not receive any proceeds from the sales.
EOG Resources tumbled 12 percent to $86.48, the biggest drop in the S&P 500. The crude oil and natural gas company lowered production growth estimates for 2010, 2011 and 2012, Jeff Dietert, an analyst at Simmons & Co. in Houston, said in a report.
PulteGroup Inc. dropped 6.4 percent to $7.56. The largest U.S. homebuilder by revenue said its net loss widened to $995.1 million, or $2.63 a share, from $361.4 million, or $1.15, a year earlier. Analysts projected a loss of 5 cents a share on average.
Hartford had the biggest advance in the S&P 500, rising 8.2 percent to $25.34. Core earnings this year may be $2.60 to $2.70 a share, the insurer said, up from the previous projection of as much as $2.30.
--With assistance from Lynn Thomasson in Hong Kong, Weiyi Lim in Taipei, Nikolaj Gammeltoft and Tara Lachapelle in New York, Catherine Dodge, Francesca Cinelli in Milan and Lisa Lerer in Washington Editors: Stephanie Borise
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