U.S. Stocks Decline Amid Concern About Rising Crude-Oil Prices





U.S. stocks declined, sending the Standard & Poor’s 500 Index down for the first time in three days, amid concern rising energy prices will threaten the economic recovery.

Titanium Metals Corp. and AK Steel Holding Corp. fell at least 2.8 percent as materials companies retreated. Crude rose above $98 a barrel. Fifth Third Bancorp dropped 6 percent after receiving a subpoena from the Securities and Exchange Commission. Boston Scientific Corp. climbed 5.6 percent after RBC Capital Markets raised its stock rating for the second- biggest maker of heart devices.

The S&P 500 fell 0.5 percent to 1,320.29 at 10:36 a.m. in New York. The benchmark gauge climbed 1.6 percent over the previous two days. The Dow Jones Industrial Average dropped 44.50 points, or 0.4 percent, to 12,181.84 today.

“There’s geopolitical concern even as we don’t see an oil supply disruption from the situation in the Middle East,” said Stanley Nabi, New York-based vice chairman of Silvercrest Asset Management Group, which oversees $9.5 billion. “Anyone who thinks that a year from now we’re going to look at the Middle East and see nothing but candy and roses, that’s not going to happen. Manufacturing, the overall U.S. economy is doing well. Still, that geopolitical situation will be an overhang.”

February Gain

The S&P 500 rose 3.2 percent in February, extending this year’s gain to 5.5 percent, amid government measures to stimulate the economy and higher-than-estimated corporate earnings. Per-share profit topped estimates at 71 percent of the 463 companies in the S&P 500 that have reported results since Jan. 10, according to data compiled by Bloomberg.

Oil surged 1.7 percent to $98.64 a barrel as unrest threatened to spread from Libya to Iran, OPEC’s second-largest producer. Concern that higher energy costs will hurt consumer spending and corporate profits overshadowed a report showing that American manufacturing expanded in February at the fastest pace since 2004.

Materials companies declined the most of 10 industries in the S&P 500. Titanium Metals retreated 4.3 percent to $18.18, while AK Steel fell 2.8 percent to $15.54.

Fifth Third Bancorp dropped 6 percent to $13.73. Ohio’s largest lender said it received a subpoena from the SEC requesting information regarding accounting on certain commercial loans.

Factories

The Institute for Supply Management’s factory index increased to 61.4 in February from 60.8 a month earlier, the Tempe, Arizona-based group said today. Readings greater than 50 signal growth, and economists projected a gain to 61, according to the median forecast in a Bloomberg News survey. Estimates of the 77 economists ranged from 58.7 to 63.3.

Stocks are likely to gain in the first five trading days of the month, according to a report from Cleve Rueckert, analyst at Birinyi Associates Inc. Since July 2010, the S&P 500 has gained on average 2.9 percent during the first five days of each month, the Birinyi data show. The index has rallied 83 percent of the time since April 2009 during that same five-day period, the report said.

Federal Reserve Chairman Ben S. Bernanke, testifying before Congress today, reiterated that policy makers are concerned about the pace of recovery and the time it’s taking to reduce unemployment even as manufacturing prospers. Tomorrow, he will testify before the House Financial Services Committee.

Commodities Beat Stocks

Metals, crops and fuel beat stocks, bonds and the dollar for a third straight month, the longest stretch since June 2008, as inflation lifted cotton and cocoa and investors speculated violence in the Middle East and northern Africa will restrain energy supplies.

The S&P GSCI Total Return Index of 24 commodities gained 3.8 percent in February and rose for a sixth consecutive month, the longest streak since 2004, data compiled by Bloomberg show. The MSCI All-Country World Index of equities in 45 nations returned 3 percent including dividends, while corporate and government bonds rose 0.13 percent, according to Bank of America Merrill Lynch’s Global Broad Market Index through Feb. 25. The U.S. Dollar Index, a gauge of the currency against six counterparts such as the euro and yen, fell 1.1 percent.

“These commodity price increases are staggering,” said Kevin Rendino, a money manager at New York-based BlackRock Inc., which oversees $3.45 trillion. “Each commodity is different, but there is a supply issue for oil. There has been real economic demand for these commodities since the economy began recovering.”

AutoZone Inc. gained 3.7 percent to $267.39. The auto-parts retails said second-quarter earnings excluding some items of $3.34 a share beat the average analyst estimate in a Bloomberg survey of $3.06.

Boston Scientific climbed 5.6 percent to $7.56. RBC Capital Markets raised its stock recommendation to “outperform” from “sector perform.” The 12-month share-price estimate is $8.