A selloff in biotechnology shares dragged the Nasdaq Composite Index lower as equities retreated after nearing their highest levels since the August selloff.
The Standard & Poor’s 500 Index ended its longest winning streak this year, after surging yesterday near where an advance faltered at the end of August, and another rally ran out of steam after the Federal Reserve stood pat on interest rates last month. The Nasdaq Biotechnology Index tumbled 3.8 percent, while energy and raw-materials shares rose as investors continued to favor the beaten-down sectors.
The S&P 500 fell 0.4 percent to 1,979.96 at 4 p.m. in New York, after reaching a two-week high Monday. The Nasdaq Composite sank 0.7 percent, weighed on by biotechs’ decline.
The S&P 500 ended a five-day advance that had restored almost $700 billion to U.S. equity prices, as expectations for a Federal Reserve interest-rate increase were pushed out into next year. That sent the dollar lower and boosted energy, raw-material and industrial shares amid speculation that a weaker U.S. currency will lift profits for multinational companies which benefit when their overseas earnings are converted back to dollars.
A slowdown in emerging markets driven by weak commodity prices forced the International Monetary Fund to cut its outlook for global growth this year to 3.1 percent from a July forecast of 3.3 percent. Next year the world economy will expand 3.6 percent, less than the 3.8 percent projected in July, the fund predicted.