Yahoo leads tech shares lower
NEW YORK — Wall Street’s two-day rally ended Wednesday as investors awaited the Labor Department’s jobs report and registered their disapproval of Yahoo Inc.’s announcement of its biggest management shakeup in more than five years.
Investors pulled back to position themselves ahead of the government’s November payroll report due Friday and next Tuesday’s Federal Reserve meeting. A series of recent economic reports have led to speculation that policymakers might cut rates after more than two years of hikes that ended in June.
However, Wall Street largely brushed off an employment indicator published by ADP and Macroeconomic Advisers that indicated the Labor Department will report an increase of 158,000 jobs — an increase that might dissuade the Fed from nudging rates downward. Economists are looking for a 110,000 rise in jobs.
“You’re seeing a lot of portfolio adjustments that will go right through to the Fed meeting, and some year-end window dressing will carry us through the end of the month,” said Scott Fullman, director of investment strategy for Hapoalim Securities. “The jobs report on Friday is obviously going to have an impact, but everyone wants to know what the Fed is thinking.”
Technology shares remained under pressure after Yahoo announced a makeover to help boost the Internet portal’s competitiveness against Google Inc. Business software maker Novell Inc. was under pressure after releasing a disappointing forecast.
The Dow Jones industrial average fell 22.35, or 0.18 percent, to 12,309.25 after rising a total of 137 points Monday and Tuesday.
Broader stock indicators also fell. The Standard & Poor’s 500 index fell 1.86, or 0.13 percent, to 1,412.90, and the Nasdaq composite index declined 6.52, or 0.27 percent, to 2,445.86.
Stocks are still up on a week boosted by a string of corporate takeover deals and indications that inflation remains in check. For the year, the Dow is up 14.85 percent, the Nasdaq has advanced 10.91 percent, and the S&P 500 is up 13.19 percent.
Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.48 percent from 4.45 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices fell.
Oil prices fluctuated after the U.S. Energy Information Administration reported that crude, gasoline, and distillate inventories all fell last week. The drop in oil inventories came as a surprise for analysts, sending a barrel of light sweet crude down 24 cents to $62.19 on the New York Mercantile Exchange.
As for stocks, many on Wall Street believe they will continue to march higher. The Fed, which has kept rates at 5.25 percent for the past two meetings, likely won’t give any hints about their direction and remain data dependent.
“I have a feeling with the market being viewed as glass half full, almost anything they say will lead to a drift higher for the stock market for the rest of the year,” said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds. “The people hoping for a hint at an ease will be disappointed, and even a knee-jerk selloff will be followed by some end of the year buying.”
Yahoo, the world’s second-largest search engine behind Google, announced an overhaul late Tuesday to help give the company a clearer direction and streamline operations. Chief Financial Officer Susan Decker was put in charge of ad sales in a move that may signal her anointment as successor to the company’s top job.
The stock, which has struggled this year while Google flourished, fell 57 cents to $26.86. Google rose $1.71 to $488.71.