US Stocks Fall Mostly Lower Wednesday 10/27 15:58
(AP) -- Banks and health care companies helped pull stocks on Wall Street
mostly lower Wednesday, as the market eased back from its latest record highs.
The S&P 500 fell 0.5% after shedding a modest gain as the selling picked up
in the last hour of trading. The Dow Jones Industrial Average dropped 0.7%.
Both indexes set all-time highs the day before.
The tech-heavy Nasdaq composite ended essentially flat after an early tech
company rally lost steam. Treasury yields were mixed. Energy futures mostly
Investors were focusing on a mixed batch of earnings from a variety of
well-known companies, including Microsoft, General Motors and Coca-Cola.
"After some strong days, markets are taking a breather," said Kristina
Hooper, chief global market strategist at Invesco. "They're certainly digesting
The S&P 500 slipped 23.11 points to 4,551.68. More than three fourths of the
companies in the benchmark index fell, with financial, health care and
industrial stocks accounting for most of the decline. Those losses offset gains
from communication services stocks and a mix of companies that rely on consumer
The Dow fell 266.19 points, or 0.7%, to 35,490.69. Most of the blue-chip
index's stocks were in the red, led by Visa, which slumped 6.9% a day after
reporting strong quarterly results.
The Nasdaq edged up 0.12 points, or less than 0.1%, to 15,235.84, and the
Russell 2000 index of small companies took the heaviest losses, falling 43.58
points, or 1.9%, to 2,252.49.
Long-term bond yields fell significantly and weighed down banks, which rely
on higher yields to charge more lucrative interest on loans. The yield on the
10-year Treasury fell to 1.53% from 1.61% late Tuesday. JPMorgan Chase fell
The yield on the 30-year Treasury fell below 2% for the first time in a
month to 1.96%, even though rates on shorter-term U.S. bonds, like the 2-year
Treasury note, have been rising.
Traders bid up shares in several companies that reported solid quarterly
results. Microsoft rose 4.2% after reporting a 24% surge in profits last
quarter as its cloud computing business bounded ahead. Google's parent company,
Alphabet, rose 5%, eclipsing its previous all-time high set Sept. 1, as a
continued rebound in digital ad spending bolstered surprisingly good financial
A mix of companies that rely on direct consumer spending also gained ground.
Domino's Pizza rose 3.1%. McDonalds rose 2.7% after reporting solid financial
results as an easing of business restrictions helped sales growth. Coca-Cola
rose 1.9% as sales grew along with the reopening of many venues and businesses
over the summer.
Some companies' latest results fell short of investors' expectations.
General Motors fell 5.4% after reporting mixed financial results as the
broader auto industry continues to face production problems because of a chip
shortage. And Texas Instruments slid 5% after the chipmaker's third-quarter
revenue fell short of Wall Street forecasts.
Fashion rental pioneer Rent the Runway fell 8.1% in its stock market debut
after an early rally faded. The New York-based company's offering priced at $21
and closed at $19.29 a share.
U.S. crude oil prices fell 2.4% and pushed energy stocks lower. Exxon Mobil
The steady flow of corporate report cards will continue Thursday with
industrial bellwether Caterpillar and technology giant Apple. Amazon and
Starbucks will also report their results on Thursday.
Outside of earnings, investors are also awaiting the latest update on U.S.
economic growth when the Commerce Department releases its report on
third-quarter gross domestic product on Thursday.
Rising inflation remains a key concern for investors as they monitor
earnings and the impact from supply chain problems and higher prices on
businesses and consumers. Investors are also looking ahead to the Federal
Reserve's meeting next week to see how it moves forward with plans to trim bond
purchases and its position on interest rates.
The central bank has maintained that inflation will prove to be "transitory"
and tied to the economic recovery, though it has been more persistent than
"Investors are coming to the realization that transitory could be
significantly longer," Hooper said.
Markets in Asia closed lower as a Chinese newspaper warned that more real
estate developers are likely to default on bonds. Investors are watching
whether one of the biggest developers, Evergrande Group, can avoid a default on
2 trillion yuan ($310 billion) of debt.
European markets mostly fell.