* Financial stocks lead S&P losers
* Snapchat owner Snap Inc surges in debut
* Caterpillar drops after HQ searched by law enforcement
* Indexes down: Dow 0.2 pct, S&P 0.4 pct, Nasdaq 0.5 pct
(Updates to late afternoon)
By Caroline Valetkevitch
March 2 U.S. stocks retreated on Thursday, led
by financial stocks, while Caterpillar shares dropped
following news that federal officials searched its Illinois
Caterpillar, 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
Financials led the decline among S&P 500 sectors, with the
S&P financial index 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
Investors also are watching the trading debut of Snap Inc
, 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 was down 51.13
points, or 0.24 percent, to 21,064.42, the S&P 500 lost
8.97 points, or 0.37 percent, to 2,386.99 and the Nasdaq
Composite dropped 30.47 points, or 0.52 percent, to
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.
Kroger fell 3.4 percent after reporting a surprise
decline in fourth-quarter same-store sales as competition
intensified in the U.S. grocery industry.
Declining issues outnumbered advancing ones on the NYSE by a
2.34-to-1 ratio; on Nasdaq, a 1.90-to-1 ratio favored decliners.
The S&P 500 posted 38 new 52-week highs and 3 new lows; the
Nasdaq Composite recorded 117 new highs and 35 new lows.
(Additional reporting by Yashaswini Swamynathan in Bengaluru;
Editing by Sriraj Kalluvila and Nick Zieminski)