Weak FedEx outlook drags down stocks
NEW YORK » Wall Street finished slightly lower yesterday after investors sold shares when major stock indexes pushed through to new highs during the session.
Investors were at first driven by relief that Asian markets recovered from a major selloff on Tuesday, and were encouraged by a barrage of corporate profit reports and takeover deals. During the session, this pushed the Dow Jones industrials index past its previous record close, and the Standard & Poor's 500 index rose to levels not seen in six years.
A drop in transportation stocks ultimately caused major indexes to finish lower, however. Analysts pinned negative sentiment on a disappointing forecast from FedEx Corp.
On Tuesday, investors overcame lackluster figures on inflation to send the Dow to its 21st record close since the start of October. The change in direction yesterday was pinned more on technical reasons than anything driven by news, according to analysts.
"There has been a lot of performance-chasing going on as the year comes to an end," said Bill Strazzullo, partner and chief market strategist at Bell Curve Trading. "This hasn't been the greatest fundamental or technical backdrop."
The Dow fell 7.45, or 0.06 percent, to 12,463.87. In afternoon trading, the Dow hit 12,498.47 -- above Tuesday's record close of 12,471.32 and intraday high of 12,491.91.
Broader stock indicators were lower. The Standard & Poor's 500 index dipped 2.02, or 0.14 percent, to 1,423.53, and the Nasdaq composite index fell 1.94, or 0.08 percent, at 2,427.61.
Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.60 percent from 4.59 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices fell.
"We view this as an interesting market -- one that is clearly liquidity driven versus fundamentally driven," said David Iben, chief investment officer of Tradewinds, an affiliate of Nuveen Investments. "That help explains why the market is moving higher with little news."
FedEx fell $2.15 to $111.85 after its fiscal third-quarter forecast came in below Wall Street expectations. The shipping company reported a 9 percent increase in its second-quarter profit amid strong results from its ground delivery business.
Used car dealer CarMax Inc. rose $4.14, or 8.5 percent, to $52.77 after its third-quarter earnings nearly doubled on strong sales to the wholesale market and increased demand for trucks and sport utility vehicles.