Wall Street opens lower after advance

Stocks slipped Wednesday, breaking a four-day winning streak, after data on both manufacturing and the service sector disappointed investors.

The Commerce Department reported that factory orders rose 0.7% in April, suggesting manufacturers may be recovering. But analysts had expected orders to rise to 0.9%.

Meanwhile, the Institute for Supply Management said its service-sector index came in at 44 in May, up slightly from April and the highest reading since October. But the increase was less than expected and marked the eighth straight month that the index indicated a contraction of the sector.

The Standard & Poor’s 500 index slumped 1.4% on the reports, and the Dow Jones industrial average fell 0.8%. But the indexes finished well off their lows, suggesting to some traders that the market’s nearly 3-month-old rally still has life in it.

“At some point, it’s hard to fight the trend, and the trend over the last couple of months has been up,” said Ryan Larson, senior equity trader at Voyageur Asset Management Inc. in Minneapolis. “People don’t want to be left out.”

The Dow fell 65.59 points to 8,675.28, while the S&P; 500 dropped 12.98 points to 931.76. The Nasdaq composite index closed down 10.88 points, or 0.6%, at 1,825.92.

The Russell 2,000 index of smaller companies fell 0.7%.

There were more than twice as many losing stocks as winners on the New York Stock Exchange.

Wednesday’s declines took the S&P; 500 index and Nasdaq down from their highest closes so far this year, reached Tuesday. Those two indexes are still up for the year, but the Dow has yet to break back into positive territory for 2009. It came within 35 points, or 0.4%, of its break-even point Tuesday.

Some of the biggest declines Wednesday were in energy, industrial and material stocks -- categories that had rallied in recent days along with commodity prices.

But after climbing eight of the last 10 trading days, crude oil pulled back Wednesday as the government reported a big jump in inventory levels, signaling continued weak demand. Oil futures slid $2.43 to finish at $66.12 a barrel on the New York Mercantile Exchange.

Among oil stocks, Valero Energy sank 18%, and Sunoco dropped 7.5%.

Prices of other raw materials also fell. An index of 19 major commodities dropped 2.7%.

The disappointing economic data pushed down Treasury yields. The benchmark 10-year T-note fell to 3.54% from 3.64% late Tuesday.