S&P 500 down for fifth day as Apple, bank stocks fall

By Sruthi Shankar

(Reuters) - U.S. stocks fell on Wednesday, with the S&P 500 dropping for the fifth session in a row, as Apple Inc continued to lead a retreat in technology stocks and financials were hit by fears that sector-wide regulations would no longer be eased.

Mounting concerns that iPhone sales have hit a wall pushed Apple shares lower for the fifth day in a row. At their session low, shares were down more than 20 percent from its record high.

"Apple really has people questioning technology and the FAANGs. A lot of investors have their hopes pinned on Apple going up and that's not happening," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

Apple's 2.7 percent drop led the heavyweight technology index <.SPLRCT> down 1.25 percent. Those losses were only outdone by a 1.88 percent-drop in financial stocks <.SPSY>.

Banks fell after Democrat Maxine Waters, poised to become chair of the U.S. House banking committee, said regulations would not be eased any further on her watch, according to a CNBC report.

"When Waters came up that had a profound impact on the markets and right about the time the S&P went negative," said Forrest.

The market started on a buoyant note as oil prices rebounded and data showed consumer prices rose only as much as expected last month, easing fears of overheating inflation and faster interest rate hikes.

But that soon petered out, with traders saying that cautious investors were looking to sell any pockets of strength in the market.

"Overall market sentiment continues to be extremely cautious. When the market gapped up you saw sellers dig in to take advantage of better prices, but there was no real support in the first 30-60 minutes," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

"It just became a self-fulfilling prophecy that the market was going to trend lower."

At 13:12 p.m. ET the Dow Jones Industrial Average was down 222.30 points, or 0.88 percent, at 25,064.19, the S&P 500 was down 23.52 points, or 0.86 percent, at 2,698.66 and the Nasdaq Composite was down 66.62 points, or 0.93 percent, at 7,134.25.

Goldman Sachs Group Inc , JPMorgan Chase & Co and insurer Travelers Cos Inc fell between 2.0 percent and 2.7 percent to join Apple among the top decliners on the Dow.

Energy stocks <.SPNY> gave up earlier gains to trade down 0.3 percent, though oil prices were higher. [O/R]

PG&E Corp slumped 24.1 percent after the utility warned it could face "significant liability" in excess of its insurance coverage if its equipment was found to have caused the blaze raging in Northern California.

Declining issues outnumbered advancers for a 1.42-to-1 ratio on the NYSE and a 1.72-to-1 ratio on the Nasdaq.

The S&P recorded 12 new 52-week highs and 13 new lows. The Nasdaq recorded 12 new highs and 149 new lows.

(Reporting by Sruthi Shankar in Bengaluru; Additional reporting by Shreyashi Sanyal)