Profit warnings take wind out of Dow sail
NEW YORK » Wall Street stumbled through a lopsided session yesterday, 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 yesterday's slide.
With investors thumbing through fresh quarterly results and company news, 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 Dow fell 85.84, or 0.61 percent, to 14,078.69 after rising 120 points 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.
The Russell 2000 index of smaller companies fell 0.53, or 0.06 percent, to 845.19.
Declining issues outnumbered advancers by about 6 to 5 on the New York Stock Exchange, where volume came to 1 billion shares, down from 1.09 billion Tuesday.
Bond prices were 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.
Light, sweet crude rose $1.04 to settle at $81.30 per barrel on the New York Mercantile Exchange following word that workers at Chevron facilities in Nigeria had staged a surprise strike and by a report that demand for gasoline is up.
Yesterday's session came as investors tried to determine whether the Fed will make a move when it meets Oct. 30-31. Last month's decision to lower short-term inte-rest rates by a larger- than-expected half percentage point helped stoke a recovery in stocks after a sharp summer pullback amid concerns about tight access to credit and an economic slowdown.
But corporate, not broad economic concerns, appeared to attract Wall Street's attention yesterday. Boeing fell $2.77, or 2.7 percent, to $98.68 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 99 cents, or 2.5 percent, to $38.73.
However, Wall Street also received some upbeat news when Costco Wholesale Corp. reported better-than-expected results. Shares of the retailer gave a boost to the Nasdaq, rising $5.82, or 9.2 percent, to $69.13.