US STOCKS failed to hold their gains

U.S. stocks fell, erasing earlier gains, as the Standard & Poor’s 500 Index failed to hold above its average level from the past 50 days amid data on factory orders and comments from the Federal Reserve’s William Dudley.

The S&P 500 (SPX) slipped 0.3% to 1,609.61 after rising as much as 0.6% earlier. The Dow Jones Industrial Average dropped 79.48 points, or 0.5%, to 14,895.48.

Fed Bank of New York President Dudley, who has supported record stimulus, said today that while economic growth will probably quicken in 2014, the central bank may prolong bond purchases if the economy turns out weaker than Fed forecasts.

The 2.1% gain in factory orders followed a revised 1.3% advance the prior month, the Commerce Department reported today in Washington. The median forecast of economists called for a 2% increase.

Data tomorrow from the ADP Research Institute may indicate American companies increased employment in June. Investors will watch the monthly U.S. labor report later this week for further signs of economic strength. Employers in the U.S. probably created 165,000 jobs in June, almost the same as in the prior month, according to the median forecast of economists ahead of July 5 figures from the Labor Department. The unemployment rate probably fell to 7.5%, matching April’s four-year low.

DaVita HealthCare Partners Inc. tumbled 5.6% after the government proposed reducing payments to dialysis-center operators. Ford Motor Co. (F) and Abercrombie & Fitch Co. added at least 2.5% amid optimism over June sales. Zynga Inc. jumped 5.1% after naming a new chief executive officer.

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