U.S. stocks gave up a promising start and finished mostly lower Wednesday as investors continued to worry about lagging wages and energy companies dropped with the price of oil.
Stocks climbed early in the session as a solid quarter from Morgan Stanley revived optimism about banks, and strong results from auto and industrial parts distributor Genuine Parts sent carmakers and suppliers higher.
The gains began to fade as oil prices and energy companies sagged. The losses accelerated after the release of the Federal Reserve's "Beige Book" survey of economic conditions.
The Fed said that economic growth continued from mid-March into early April and that pay improved for some workers. But investors have been wondering when rising statistics such as consumer confidence will start to turn into better pay and greater spending.
"Show me where those numbers are translating into something more than just feelings," said Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management. "People are looking for evidence that these confidence numbers are translating into actual actions, and the Beige Book showed that over the last couple of months, it's been more of the same."
The Standard & Poor's 500 index finished down 4.02 points, or 0.2%, at 2,338.17. It had been up as much as 10 points, or 0.4%, earlier in the day. The Dow fell 118.79 points, or 0.6%, to 20,404.49. Half of the blue-chip index's losses came from IBM, which reported weaker-than-expected sales in the first quarter.
The Nasdaq composite rose 13.56 points, or 0.2%, to 5,863.03 as healthcare companies climbed. And there were signs of optimism about the economy. The Russell 2000 index, made up of smaller companies that tend to be more U.S.-focused, rose 5.24 points, or 0.4%, to 1,367.13.
Oil prices slumped after the Energy Information Administration said U.S. crude inventories didn't shrink as much as investors hoped they would, and the EIA said the stockpiles are larger than normal for this time of year. Benchmark U.S. crude futures sank $1.97, or 3.8%, to $50.44 a barrel. Brent crude, used to price international oils, fell $1.96, or 3.6%, to $52.93 a barrel in London.
All 34 energy companies in the S&P 500 index finished lower. Chevron fell 1.4% to $104.23. Marathon Oil sank 4.3% to $15.06.
Schutte said faster wage growth will show up eventually, even if monthly and quarterly reports are uneven. As wages rise and people spend more money, he thinks, the economy will keep growing.
"The consumer is in a very good place from a debt-to-asset standpoint" after reducing debt in recent years, he said. "When they get wage increases, they're more likely to spend those in the future than to save them."
Schutte said that ultimately will help the stock market more than any of President Trump's proposed pro-growth policies.
IBM slumped 4.9% to $161.69 after the technology and consulting firm reported $18.16 billion in first-quarter revenue, which, according to FactSet, was more than $200 million below analysts' estimates.
Bond prices fell, reversing most of their gains from Tuesday. The yield on the 10-year Treasury note rose to 2.21% from 2.17%. That hurt high-dividend payers, including utilities and household goods companies. FirstEnergy fell 2% to $30.85. Beauty products retailer Coty slid 2.3% to $17.99.
Genuine Parts rose 2% to $91.91 after it raised its profit forecast for the year, although it acknowledged its U.S. business has been weak. Genuine Parts, along with carmakers, used car sellers and retailers of auto parts and tires plunged earlier this month after automakers reported disappointing March sales.
Intuitive Surgical climbed 6.4% to $807.95 after its profit and revenue beat analysts' projections. The robotic surgery system maker said shipments of its Da Vinci device jumped, as did surgeries performed with the device.
Lam Research jumped 6.9% to $136.17 after the chip equipment maker posted solid results for its third quarter and a strong fourth-quarter forecast.
Wholesale gasoline fell 5 cents, or 3%, to $1.66 a gallon. Heating oil fell 4 cents, or 2.5%, to $1.58 a gallon. Natural gas rose 4 cents to $3.19 per 1,000 cubic feet.
The price of gold, which has climbed steadily in recent weeks, fell $10.70 to $1,283.40 an ounce. Silver fell 11 cents to $18.16 an ounce. Copper rose 1 cent to $2.53 a pound.
The dollar rose to 108.70 yen from 108.42 yen. The euro fell to $1.0721 from $1.0730.
British stocks continued to fall. The FTSE 100 slid 0.5% after Tuesday's 2.5% plunge. Other major European indexes recovered modestly. In France, the CAC-40 gained 0.3%. Germany's DAX edged up 0.1%. In Japan, the Nikkei 225 edged up 0.1%. The South Korean Kospi shed 0.5%, and Hong Kong's Hang Seng index fell 0.4%.
2 p.m.: This article was updated with closing prices, context and analyst comments.