US stocks remain down

US stocks extended losses for the sixth straight day on Wednesday as investors worried that a slowing economy could deepen the market's retreat. The latest evidence of a slowdown came in the Federal Reserve's Beige Book, which gives an anecdotal report on the economy. It reinforced Fed chief Ben Bernanke's bearish assessment on growth delivered late on Tuesday.
The market's mood soured when Bernanke gave no hint that the central bank would offer a third round of stimulus to an economy losing steam. The Beige Book said costlier food and energy prices as well as supply disruptions stemming from Japan's earthquake were taking a toll.
The S&P 500 was down about 6 percent from its 2011 intraday high hit on May 2nd, but was still up 1.7 percent for the year. Stocks have come under pressure recently due to a slew of weak economic data, especially in the labour market. "Investors are re-pricing the slowdown after Bernanke crystallised it," said Jason L. Ware, senior equity research and trading analyst at Albion Financial Group in Salt Lake City, Utah.
The Fed's $600 billion second round of stimulus, expected to end this month, has been a catalyst for the stock market's advance. Many of the day's biggest decliners were US-traded Chinese companies after Interactive Brokers Group banned clients from borrowing money to buy some Chinese stocks. New York-listed shares of Renren Inc fell 13.6 percent to $10.51 and Baidulost 3.3 percent to $120.67.
Mortgage insurers' shares also fell after MGIC Investment Corp reported disappointing monthly operating statistics. Shares of MGIC Investment, the biggest mortgage insurer to Fannie Mae and Freddie Mac, fell 20.2 percent to $5.80. The Dow Jones industrial average dropped 21.87 points, or 0.18 percent, to 12,048.94. The Standard & Poor's 500 Index lost 5.38 points, or 0.42 percent, to 1,279.56. The Nasdaq Composite Index fell 26.18 points, or 0.97 percent, to 2,675.38.
"I think 1,250 is a key level (on the S&P) and, if we get there, likely to provide support for the market, barring any further erosion in the underlying economic data," Ware said. Credit Suisse's US equity strategist Doug Cliggott said on Wednesday the S&P 500 could fall roughly 10 percent from its current level, partly due to the approaching end of the Federal Reserve's bond-buying programme.
"We would think an index between 1,170 and 1,200 would be a realistic estimate of where we might be headed," Cliggott said at the Reuters Investment Outlook Summit in New York. His comments followed a bearish tone struck on Tuesday by Citigroup strategist Tobias Levkovich. He said major US stock indexes could fall as much as 10 percent from their May highs. A 10 percent fall is typically described as a market correction. Ciena tumbled 16.2 percent to $20.29, while JDS Uniphase Corp dropped 5.5 percent to $17.40. Limiting losses, the energy sector rose after talks at the oil cartel Opec in Vienna broke down without an agreement on a production hike. The S&P 500 energy index rose 0.4 percent, with Exxon Mobil up 1 percent at $80.76.