1:15 PM EST, December 12, 2013
NEW YORK (Reuters) - Stocks slid on Thursday, putting the S&P 500 on track for a third straight fall as economic data did little to give investors clarity on how soon the Federal Reserve would begin to scale back its stimulus program.
Concerns that the Fed would taper its stimulus earlier than expected have weighed on the market for days. The three major U.S. stock indexes recorded their biggest drop in a month on Wednesday as traders took profits from the recent rally a day after a provisional budget deal was reached in Washington. The budget agreement removed a potential economic hurdle cited by the Fed in September when it chose to keep its stimulus intact.
Many market participants have expected the Fed to announce a cut in stimulus in March, but that timeline may have been accelerated by some in the wake of Friday's better-than-expected November payrolls report. The Fed has said it would slow its $85 billion a month in bond purchases when certain economic measures meet its targets, including a drop in the U.S. unemployment rate.
Data on Thursday once again sent mixed signals on the economy, as retail sales rose solidly in November and October business inventories showed the largest gain since January. However, initial claims for unemployment benefits surged last week - rising 68,000 in their biggest jump in a year.
"It's a little bit of manic concern over tapering. The economy is not really getting that much better," said Stephen Massocca, managing director at Wedbush Equity Management LLC in San Francisco.
"The equity income space is under pressure over tapering fears - to the point it is getting a little cuckoo."
The central bank's massive bond-buying program has been a driving force in the S&P 500's gain of 24.5 percent this year.
The Fed's policymakers are due to meet Dec 17-18 for the final time this year.
The Dow Jones industrial average <.DJI> fell 107.64 points or 0.68 percent, to 15,735.89. The S&P 500 <.SPX> lost 6.89 points or 0.39 percent, to 1,775.33. The Nasdaq Composite <.IXIC> dropped 4.335 points or 0.11 percent, to 3,999.478.
In the retail sector, shares of J.C. Penney Co Inc
Lululemon Athletica Inc
Investors also dealt with a flurry of initial public offerings, including Hilton Worldwide Holdings Inc
Food services provider Aramark Holdings Corp
(Editing by Jan Paschal)
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