By Rita Nazareth March 19 (Bloomberg) -- U.S. stocks declined, ending an eight-day winning streak for the Dow Jones Industrial Average, as India’s unexpected interest rate boost spurred speculation withdrawals of economic stimulus will curtail global growth. Exxon Mobil Corp. and Schlumberger Ltd. dragged energy shares to the biggest losses in the Standard & Poor’s 500 Index as oil fell below $82 a barrel. Palm Inc. plunged 19 percent after forecasting sales that trailed analysts’ estimates. Boeing Co. rose 2.1 percent after accelerating production plans for its 777 and 747 planes. The S&P 500 fell 0.2 percent to 1,163.05 at 10:19 a.m. in New York, trimming its third straight weekly advance to 1.1 percent. The Dow dropped 5.22 points, or less than 0.1 percent, to 10,773.95. “Keep an eye on the punch bowl,” Larry Kantor, head of research at Barclays Plc, told Bloomberg Radio before the announcement in India. Governments that injected funds into their economies to jumpstart growth are “going to be withdrawing that stimulus,” he added. “That’s actually the big risk.” Most stocks fell yesterday on concern the Federal Reserve will boost the discount rate, the amount charged on direct loans to banks. Economists said this may occur before the next meeting of the Federal Open Market Committee on April 28. Fed spokesman David Skidmore declined to comment. 16-Month High India’s central bank unexpectedly raised rates for the first time since July 2008 after inflation accelerated to a 16- month high. The Reserve Bank of India increased the benchmark reverse repurchase rate to 3.5 percent from a record-low 3.25 percent and the repurchase rate to 5 percent from 4.75 percent, according to a statement in Mumbai. The surprise decision comes a month before the bank’s scheduled monetary policy meeting. The S&P 500 climbed to highest level since September 2008 on March 17. This week’s rally brings the surge from a 12-year low last March to 72 percent after governments and central banks around the world maintained low interest rates and committed more than $12 trillion to stimulate the economy. Stock swings have narrowed, with the 10-day average change between intraday lows and highs for the S&P 500 falling to 0.7 percent from 1.8 percent on Feb. 8. “I don’t expect big moves,” said Peter Jankovskis, who helps manage about $1.8 billion as co-chief investment officer at Oakbrook Investments in Lisle, Illinois. “Stocks are fairly valued after the rally we’ve had from the lows. People are waiting for more signals that the economic recovery is sustainable.” To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net.

Source