Starbucks Corp. and Amazon.com Inc. each lost more than 2 percent in Nasdaq Stock Market trading after the government said growth in spending slowed to 0.2 percent in July as incomes decreased 0.7 percent. Dell, the second-biggest personal-computer maker, posted its biggest drop since 2000. Constellation Energy Group Inc. declined 2.6 percent and helped drive all 31 utility companies in the Standard & Poor's 500 Index lower after Jefferies Group Inc. said the largest U.S. power marketer may have to sell more shares.
The S&P 500 slipped 17.85 points, or 1.4 percent, to 1,282.83, ending a three-day advance. The Dow Jones Industrial Average lost 171.22, or 1.5 percent, to 11,543.96. The Nasdaq Composite Index retreated 44.12 to 2,367.52. Three stocks fell for each that rose on the New York Stock Exchange.
Technology shares led stocks lower as the Commerce Department report also said prices excluding food and energy, the Federal Reserve's preferred gauge, climbed 2.4 percent on a yearly basis. The data overshadowed a better-than-forecast reading of 63 in the Reuters/University of Michigan consumer sentiment index and damped optimism spurred by better-than- estimated growth in gross domestic product yesterday and an unexpected increase in orders for durable goods on Aug. 27.
The Morgan Stanley Cyclical Index, a gauge of companies that rely the most on economic expansion to boost profits, lost 1 percent today as 26 of its 30 stocks fell. The index jumped 2.5 percent yesterday for its steepest advance in three weeks. led by a 48 percent jump in Advanced Micro Devices Inc.
About 959 million shares changed hands on the NYSE, 36 percent below the average for the year. Trading volume had set new lows for the year for five straight days before yesterday. U.S. markets will be closed on Sept. 1 for the Labor Day holiday.
The S&P 500 gained 1.2 percent in August, snapping a two- month retreat that sent the measure to an almost three-year low on July 15. The gain was fueled by a more than 20 percent drop in oil from a record, a jump in the dollar and growing speculation that the worst of banks' mortgage losses are over.
The S&P 500 and the Dow average both fell 0.7 percent this week. The Nasdaq Composite Index dropped 2 percent for the week.
The S&P 500 completed only its third monthly advance since reaching a record in October. It is still down 13 percent this year.
The S&P 500's August gain was led by so-called consumer discretionary companies, which include retailers, automakers, lodging companies and restaurant chains. The S&P 500 Consumer Discretionary Index rallied 7 percent this month for the best gain among 10 industries through yesterday