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Nasdaq tops 3,000 for first time since 2000

By msnbc.com news services

U.S. stocks were struggling Wednesday as traders cashed in after indexes hit multi-year highs on stronger-than-expected economic data.

The Nasdaq topped 3,000 for the first time since mid-December 2000 before retreating. The Dow industrials and the S&P 500 initially added to the previous day's gains that catapulted them to 4-year highs.

Analysts warned the year's rally has come on light volume, and hitting new highs could spark selling on technical triggers.

"There are a lot of people that put in technical sell orders, so that is a possibility," said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Illinois.

Some traders said comments by U.S. Federal Reserve Chairman Ben Bernanke before Congress also pushed stocks lower.

Peter Boockvar, equity strategist at Miller Tabak & Co in New York, cited "commentary on Bernanke acknowledging the improvement in the labor market."

"It means we are not going to get (more monetary easing) anytime soon," Boockvar said.

Bernanke said the economy would have to strengthen to ensure that the unacceptably high jobless rate keeps dropping, suggesting the option of further Fed bond buying remains on the table.

Energy stocks were among the biggest weighs on the S&P 500 after data showed a build-up in crude inventories and U.S. light crude futures fell. The S&P energy sector index lost 1 percent.

The market rallied early after data showed the U.S. economy grew slightly faster than initially thought in the fourth quarter while the pace of business activity in the U.S. Midwest picked up in February to its highest level in 10 months.

With improvement in new orders and employment gauges, the Purchasing Managers Index advanced the perception of a continuing recovery in key U.S. economic sectors. The optimism has fueled a gain of more than 9 percent for the S&P 500 this year.

Reuters contributed to this report.