Blue chips decline; tech stocks up
NEW YORK – Wall Street stumbled through a lopsided session Wednesday, closing mixed as profit warnings and news from blue chip names Alcoa Inc. and Boeing Co. dragged down the Dow Jones industrial average but largely spared technology stocks.
A pullback was to be expected after the Dow and the Standard & Poor’s 500 index finished at new highs Tuesday amid enthusiasm over comments from Federal Reserve policymakers about interest rates, but corporate news appeared to hasten Wednesday’s slide.
Declines by Dow components Boeing and Alcoa, among others, 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 corporate announcements, the latest economic readings did little to dislodge the dichotomy between blue chips and tech stocks. 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 still relatively calm trading Wednesday followed a surge the day before that was sparked by release of the minutes from the Fed’s last meeting. Wall Street initially was 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.”
The Dow fell 85.84, or 0.61 percent, to 14,078.69 after rising 120 points on Tuesday.
Broader stock indicators were mixed. The S&P 500 fell 2.68, or 0.17 percent, to 1,562.47, and the technology-laden Nasdaq composite index rose 7.70, or 0.27 percent, to 2,811.61.
Bond prices had a late-session uptick but finished little changed. The yield on the benchmark 10-year Treasury note was unchanged at 4.65 percent, compared with late Tuesday. The dollar was mixed against other major currencies, while gold prices rose.
Wednesday’s session came as investors tried to determine whether the Fed will make a move when it meets Oct. 30-31. Last month’s surprise half-point rate cut helped stoke a recovery in stocks that were pummeled this summer amid concerns about tight access to credit and an economic slowdown.