Stocks Trade Mixed After Rally
(10-10) 09:47 PDT NEW YORK, (AP) —
Wall Street stumbled through a lopsided session Wednesday as profit warnings and news of manufacturing delays from Boeing Co. dragged down the Dow Jones industrial average but largely spared technology stocks.
While a retrenchment might be expected after sharp gains seen Wednesday Д the Dow and the Standard & Poor’s 500 index finished at new highs Д investors turned some of their attention from broader economic concerns to corporate news of the day. Declines by Dow components Boeing and Alcoa Inc. hurt the 30-stock index. Meanwhile, International Paper Co. and Chevron Corp. moved lower on profit news.
With investors thumbing through fresh quarterly results and company news, new economic data did little to dislodge the market’s blue chip versus tech stock dichotomy Wednesday. A report showed inventories among U.S. wholesalers ticked up in August, while a trade group for real estate agents warned the drop in sales of existing homes this year will be steeper than had been expected.
The stock market’s uneven but relatively calm trading Wednesday follows a surge that accompanied the release of minutes from the Fed’s last meeting. Wall Street was initially ebullient that the Fed didn’t appear to rule out further rate cuts, but on reflection, some investors seemed to be questioning whether that response was a little too optimistic.
“People are looking backward at what the Fed was discussing to try and discern whether or not we’re in a recession,” said Kim Caughey, equity research analyst at Fort Pitt Capital Group. “Looking in the rearview mirror isn’t going to give us that clarity because its history, so instead I’m really looking forward to what corporate earnings will show.”
In midday trading, the Dow fell 104.21, or 0.74 percent, to 14,060.32 after rising 120 points on Tuesday.
Broader stock indicators traded mixed. The S&P 500 fell 5.75, or 0.37 percent, to 1,559.40, and the technology-heavy Nasdaq composite index rose 0.98, or 0.03 percent, to 2,804.89.
Bonds rose as stocks declined. The yield on the benchmark 10-year Treasury note fell to 4.63 percent from 4.65 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude fell 31 cents to $79.95 per barrel on the New York Mercantile Exchange. The Energy Department’s forecast for winter demand helped support prices, but investors were still concerned that a warm winter could take futures lower.
In economic news, the inventories among U.S. wholesalers rose by 0.1 percent in August, below the 0.03 percent that had been expected, according to Dow Jones Newswires.
The National Association of Realtors issued its eighth straight downwardly revised forecast, predicting U.S. existing home sales will come in 10.8 percent lower than last year.
Investors are trying to determine whether the Fed will make a move when it meets Oct. 30-31. Last month’s decision to lower short-term interest rates by a larger-than-expected half percentage point helped stoke a recovery in stocks that had been hurt by concerns about tight access to credit and an economic slowdown.
In corporate news, Boeing fell $3.10, or 3.1 percent, to $98.35 after announcing it was delaying initial deliveries of its 787 Dreamliner commercial aircraft by six months. The company cited challenges in finishing assembly of the first airplanes.
Alcoa posted a 3 percent profit increase as revenue fell. But excluding a boost to its bottom line from the sale of a stake in a Chinese aluminum company, the aluminum producer’s results fell short of Wall Street’s expectations. Alcoa fell $1.26, or 3.2 percent, to $38.49.
International Paper lowered its projection for how much it expects to take in from sales of land in the third quarter, news that sent shares falling 76 cents, or 2.1 percent, to $36.30.
Chevron fell $1.89, or 2.1 percent, to $90.92 after the company warned that its third-quarter profit will come in well below the $5.4 billion it earned in the second quarter.
However, Wall Street also received upbeat news from companies including Costco Wholesale Corp., which reported better-than-expected results. Shares of the retailer rose $5.26, or 8.3 percent, to $68.70.
Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume came to 508.6 million shares.
The Russell 2000 index of smaller companies fell 3.22, or 0.38 percent, to 842.50.
Overseas, Japan’s Nikkei stock average rose 0.10 percent. Britain’s FTSE 100 rose 0.27 percent, Germany’s DAX index rose 0.08 percent, and France’s CAC-40 fell 0.40 percent.
___
On the Net:
New York Stock Exchange:
Nasdaq Stock Market:
