Market Falls as Smaller Stocks Sell 0ff

The stock market slipped on Wednesday, a day after the Standard & Poor's 500-stock index flirted with the 1,900 mark for the first time, as small-capitalization stocks sold off.

The Dow Jones industrial average fell 101.47 points, or 0.61 percent, to 16,613.97, according to preliminary figures. The S.&P. 500 lost 8.92 points, or 0.47 percent, to 1,888.53. The Nasdaq composite index dropped 29.54 points, or 0.72 percent, to 4,100.63.

The S.&P. 500 is coming off three straight daily advances. On Tuesday, the S.&P. 500 and the Dow touched nominal record highs.

Leading the declines in the Dow and the S.&P. 500 was IBM, which fell 1.8 percent after it said in a regulatory filing that it expected its hardware profit to be flat this year.

The Fossil Group was the biggest percentage decliner in the S.&P. 500, falling 10.3 percent a day after the retailer gave a second-quarter profit outlook that was much lower than expected, pressured by rising costs.

Macy's dipped 0.2 percent after its sales missed expectations.

The Russell 2000 index of small-capitalization stocks dropped 1.6 percent, underperforming the three major indexes and extending a divergence that has been pronounced throughout 2014. Some analysts are concerned that persistent weakness in small-cap stocks could spread throughout the market.

Government data showed potential signs that inflation pressures may be creeping up as the economy improves. Producer prices recorded their largest increase in one and a half years in April as food prices surged.

"A lot of people are looking for evidence to confirm the tough winter was the only reason we saw slowing," in activity, said Joe Bell, senior equity analyst at Schaeffer's Investment Research.

Deere fell 2 percent after the farm equipment company cut its full-year sales outlook even as it reported a better-than-expected quarterly profit.

Shares of the online retailer Zulily shot up 9.3 percent, rebounding after dropping to a record low earlier in the day following the expiration of its lockup period.

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