Stocks close lower after seesaw trading
NEW YORK » Nervous investors cashed in profits from a two-day rally on Wall Street yesterday, leaving stocks marginally lower after a session of seesaw trading.
Stocks opened lower, swung to a gain after the Federal Reserve's Beige Book of regional economic conditions said inflation was in check and then dropped as the session neared its close.
Consumer discretionary and industrial stocks finished lower as investors sold off Amazon.com Inc., Boeing Co. and UPS Inc. on disappointing earnings news.
Energy stocks gained as a spike in oil prices helped the sector. A barrel of light crude settled at $73.94, up 19 cents, on the New York Mercantile Exchange. Oil had advanced as much as 90 cents a barrel earlier in the session. Health care and utility stocks also rose as investors headed into the traditionally defensive sectors, which tend to do well in a choppy economy.
In months of erratic trading, investors have frequently met one day's advances with a selloff the next session to lock in profits. With volatility on the rise, swings of 100 points are now "the norm, not the exception," said Arthur Hogan, chief market analyst at Jefferies & Co.
At the close of trading, the Dow Jones industrial average lost 1.20, or 0.01 percent, to 11,102.51after rising a total of 230 points the first two days this week.
Broader stock indicators also fell. The Standard & Poor's 500 index lost 0.48, or 0.04 percent, to 1,268.40, while the Nasdaq composite index lost 3.44, or 0.17 percent, to 2,070.46.
Bonds rallied. The yield on the 10-year Treasury note fell to 5.03 percent, down from 5.07 percent Thursday. The U.S. dollar was mixed against other major currencies. Gold prices rose.
While earnings season is off to a solid start, the outlook is uncertain. "From the companies that have reported, I would say that it's clear that earnings growth is going to slow in the second half of the year. The question is to what degree," said Brian Bush, director of equity research, Stephens Inc.
Investors are slightly anxious over earnings, but much more nervous about the Aug. 8 meeting of the Fed, which could bring the 18th straight increase in the fed funds rate, the nation's benchmark interest rate. The markets are hoping that the Fed will then put its rate hike program on hold.
In company news, General Motors Corp. rose $1.34, or 4.4 percent, to $32 after it said it lost $3.2 billion in the second quarter as it absorbed heavy charges for its massive restructuring program. But the world's largest automaker reported an adjusted profit without the charges that beat Wall Street estimates and its sales surged.