U.S. stocks decline on buying fatigue

SAN FRANCISCO (MarketWatch) � U.S. stocks fell Thursday as investors sold off cyclical stocks such as energy and waited for fresh reasons to buy after a heady start to the year.

The Dow Jones Industrial Average DJIA �closed down 42.47 points, or 0.3%, to 13,944.05. The index was down as much as 134 points, or 1%, earlier in the day.

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The S&P 500 SPX �slipped 2.73 points, or 0.2%, to 1,509.39 after touching an intraday low of 1,498.49, with materials and energy the biggest decliners among the index�s 10 major industry groups. Before a recent retreat, the S&P 500 had been up more than 6% for the year. Read more on energy stocks.

The Nasdaq Composite Index COMP �fell 3.34 points, or 0.1%, to 3,165.13. The index touched an intraday low of 3,135.98.

The dip in Thursday�s stock market is likely profit-taking and not connected to any one thing as investors wait for a pullback to jump on buying opportunities, said Scott Wren, senior equity strategist at Wells Fargo Advisors.

�I don�t think there�s too much going on in terms of drivers, it�s more just trading action,� said Wren. In fact, Wren said the market is more likely �to grind a little higher� in the short term, expecting the eventual selloff to come at a higher level. Read Chuck Jaffe: Is this market headed for a correction?

In Frankfurt, the European Central Bank left interest rates unchanged. ECB President Mario Draghi said in a news conference that the bank�s accommodative monetary-policy stance should support growth, but that economic-recovery risks are skewed to the downside. See: Draghi says euro�s recent rise reflects confidence

Given Draghi�s recent comments about �positive contagion� in the euro-zone, markets were not prepared for his more pessimistic tone Thursday, said Mark Luschini, chief investment strategist at Janney Montgomery Scott. That, and there�s so much buying power already baked into the stock market, economic activity needs to catch up to prices, he said.

�The general feeling over last few trading sessions is that the market is tired, not because of selling, but an exhaustion of buying,� Luschini said.

Declining stocks outnumbered advancers by about 13 to 10 on the HYSE and by about 17 to 10 on the Nasdaq. Composite volume topped 3.4 billion shares on the NYSE and 1.9 billion on the Nasdaq Stock Market.

Despite the bumps in the markets this week, Stephen Pope, managing partner at Spotlight Ideas, said he doesn�t see any big panic button to press unless the Dow drops past the 13,500 level and the S&P 500 index drops to 1,445. �We�ve got plenty of fat on the bone here; there will be retracement, days of correction,� he said. �The downside in these price movements are buying opportunities.�

In the U.S., retailers reported same-store sales for January, with Macy�s Inc. M �reporting same-store-sales growth well above expectations. See: U.S. retailers� January sales showing strength.

Reuters Enlarge Image David Einhorn of Greenlight Capital

Hedge-fund manager David Einhorn said he opposes a proposal by technology giant Apple Inc. AAPL �to eliminate preferred stock. Einhorn also said that his fund is long Apple shares and that the iPad maker is misvalued by the market. See: Apple sued by Einhorn�s Greenlight Capital.

After trading up slightly for most of the day, shares of Apple jumped to close up nearly 3% after the iPhone maker said it would evaluate Greenlight�s proposal. Read more on Apple response.

In other corporate news, Sprint Nextel Corp. S �said its fourth-quarter loss widened but its revenue exceeded forecasts. Shares of the wireless carrier slipped 0.5%.

Shares of Akamai Technologies Inc. AKAM �sank more than 15% after the company�s quarterly revenue growth disappointed investors. Read more on Akamai.

Green Mountain Coffee Roasters Inc. GMCR � shares fell more than 5% after the company projected downbeat sales growth for the current quarter. Einhorn told CNBC in an interview that he�s still short the stock. Read more on Green Mountain.

In addition to economic data, investors also parsed through comments from Chicago Fed President Charles Evans. In an interview with CNBC, Evans said he�s optimistic the U.S. economy will improve and that the Fed�s policies have done a lot of good already.

Evans, a member of the policy-making Federal Open Market Committee, was the first to call for the Fed to set a jobless-rate level that would need to be hit in order for the central bank to lift interest rates. See: Fed�s Evans optimistic momentum will pick up

In economic news, jobless claims slipped to an adjusted 366,000 for the week. Read more on jobless claims.

Also, U.S. productivity declined by 2% in the fourth quarter, according to the Labor Department. Read more on U.S. productivity.