Wall Street retreats after rally; Caterpillar, financials fall

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U.S. stocks retreated on Thursday, led by financial stocks, while Caterpillar (CAT. N) shares dropped following news that federal officials searched its Illinois facilities. Caterpillar (CAT. N), down 4.6 percent, was the biggest drag on the Dow and among the biggest negatives for the S&P 500. It was not immediately clear why federal agents raided the three locations. Financials led the decline among S&P 500 sectors, with the S&P financial index . SPSY down 1.3 percent and on track for its biggest daily percentage decline since mid-January. Bank stocks had surged on Wednesday on expectations increased that the Federal Reserve will hike interest rates this month. The S&P 500 and the Nasdaq had their best day since the November election after U.S. President Donald Trump's measured tone in his first speech to Congress lifted optimism. "I don't attribute it to too much, other than the market taking a little bit of a break," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago."Investors are looking at the run and saying we're up a significant amount since the election. Clearly, this pace isn't going to continue, and people are rotating to the parts of the market that have not participated" as much in the post-election rally.

Investors also are watching the trading debut of Snap Inc (SNAP. N), the parent company of messaging app Snapchat. The shares were up 51.5 percent at $25.75 after pricing at $17. The Dow Jones Industrial Average . DJI was down 51.13 points, or 0.24 percent, to 21,064.42, the S&P 500 . SPX lost 8.97 points, or 0.37 percent, to 2,386.99 and the Nasdaq Composite . IXIC dropped 30.47 points, or 0.52 percent, to 5,873.56. The S&P 500 is up 11.6 percent since the Nov. 8 election.

Several Fed officials this week have stoked expectations of an interest rate hike this month as the economy strengthens. Fed Chair Janet Yellen is set to speak on Friday and could provide the strongest indication about a move in coming weeks. The Fed's policy-setting meeting is set for March 14-15. Traders have currently priced in a 74-percent chance of a rate hike this month, up from roughly 30 percent at the start of the week, according to Thomson Reuters data.

U.S. law enforcement searches Caterpillar's Illinois facilities CHICAGO Federal law enforcement officials searched three facilities of heavy machinery manufacturer Caterpillar Inc on Thursday, a spokeswoman for the U.S. Attorney Office for the Central District of Illinois said, prompting a sharp selloff in the company's stock.

U.S. jobless claims near 44-year low; rate hike expected this month WASHINGTON The number of Americans filing for unemployment benefits fell to near a 44-year low last week, pointing to further tightening of the labor market even as economic growth appears to have remained moderate in the first quarter.

Amazon blames human error for cloud-service disruption Amazon.com Inc blamed human error for the disruption in its cloud services that resulted in widespread glitches for its clients from news sites to government services on Tuesday.