Stock retreat after record-setting rally

Traders Peter Tuchman, left, and Sal Suarino gather

Traders Peter Tuchman, left, and Sal Suarino gather with others at a post on the floor of the New York Stock Exchange Tuesday, May 27, 2014. Photo Credit: AP / Richard Drew

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Stocks fell Wednesday after a four-day rally lifted the Standard & Poor's 500 index to a record. Investors await a report Thursday that could show the economy contracted in the first quarter.

At the close on Wall Street, the S & P 500 dropped 0.1 percent, or 2.1 points, to 1,909.8. The Dow Jones industrial average retreated 42.3 points, or nearly 0.3 percent, to 16,633.2. The Nasdaq composite was down 12 points, about 0.3 percent, at 4,225.1 points.

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"After hitting a high, the market is taking a little bit of a breather," said Michelle Clayman, chief investment officer at New Amsterdam Partners in New York, which manages $1.6 billion. "The fundamentals of the U.S. market still look decent."

A report by the U.S. Commerce Department Thursday may show the U.S. economy contracted 0.5 percent in the first quarter, following a preliminary estimate of 0.1 percent annualized growth, according to economists surveyed by Bloomberg News. GDP rose at a 2.6 percent annualized pace in the previous period. Economists forecast growth of 3.5 percent during the second quarter.

"People are focusing on the GDP number tomorrow," said John Traynor, chief investment officer of People's United Bank Wealth Management in Bridgeport, Connecticut. His firm oversees $5.2 billion. "There are two camps of investors. They seem to fall down on the side of, 'Is the economy at a point where it reaches a self-sustaining path?' "

Reports from Bloomberg News and The Associated Press were used in this story.

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