Stocks End Broadly Lower; Dow Loses 32.89 Points
The stock market ended broadly lower Wednesday for a second day, as a rally early in the session gave way to fresh selling in the final hours.
The market was undercut in part by another jump in Treasury bond yields.
Share prices couldn’t get traction despite some strong corporate earnings reports and the biggest drop in oil prices in more than a month.
Lately, “Lower oil and other good news just isn’t trusted,” said Paul McManus, who oversees $8 billion as chief investment strategist at Independence Investment in Boston.
The Dow Jones industrial average lost 32.89 points, or 0.3%, to 10,344.98. The Dow had eased 7.13 points Tuesday.
Among broader indexes, the Standard & Poor’s 500 slid 5.16 points, or 0.4%, to 1,191.38, and the technology-heavy Nasdaq composite gave up 9.40 points, or 0.5%, to 2,100.05.
Falling stocks outnumbered winners by 2 to 1 on the New York Stock Exchange and by 3 to 2 on Nasdaq.
The S&P; 500 has slumped in five of the last six weeks, weighed down by worries about inflation pressures from high energy costs, rising interest rates and concerns about consumer spending.
A strong rally on Monday, after President Bush nominated Ben S. Bernanke, chairman of the president’s Council of Economic Advisors, to succeed Alan Greenspan as Federal Reserve chairman, raised hopes that Wall Street was breaking out of its funk.
The Dow surged nearly 170 points, or 1.7%, on Monday, its biggest gain since April.
But buyers have been reluctant to step up aggressively in the last two sessions.
Some analysts said the stock market could have done worse Tuesday and Wednesday, given the renewed surge in bond yields. The 10-year Treasury note ended at a seven-month high of 4.59% on Wednesday, up from 4.53% on Tuesday and 4.45% on Monday.
Neither stocks nor bonds responded to a slide in oil prices Wednesday. Near-term crude futures in New York fell $1.78 to $60.66 a barrel after the government said U.S. oil inventories jumped 4.4 million barrels to 316.4 million last week, the third straight increase.
“There is plenty of oil out there,” said Ralph Preston, senior market analyst at Heritage West Financial, a futures brokerage in San Diego. “Supplies are set to rise through the fourth quarter and prices should fall.”
In the meantime, third-quarter earnings reports generally have been favorable, analysts say. That should at least put a floor under the stock market, some say. The Dow is down 4.1% year to date; the S&P; 500 is down 1.7% not including dividends.
“So far earnings have been holding up well, with many more positive surprises than disappointments,” said Dirk van Dijk, director of research at earnings tracker Zacks Investment Research in Chicago.
Among Wednesday’s market highlights:
* Insurance firm Chubb jumped $5.59 to $91.62 after reporting quarterly operating profit of 89 cents a share, far above expectations, as claims from Hurricane Katrina were lower than expected.
* Automatic Data Processing, the payroll, tax and transaction processor, climbed $2.44 to $45.99 after reporting profit that beat Wall Street forecasts by 3 cents a share and issuing a bullish fourth-quarter forecast.
Also rising on earnings reports were Ryder System, the No. 1 truck leasing company, which rose $3.11 to $37.06, and analytical equipment maker PerkinElmer, up $1.59 to $22.41.
* On the downside, Amazon.com plunged $6.42 to $39.75. The Internet retailer late Tuesday beat third-quarter earnings expectations but was downbeat about fourth-quarter sales.
By contrast, Internet search leader Google soared $8.53 to a record high of $355.44. The stock has been on another bull run since Friday, after it reported a sevenfold increase in quarterly earnings.
* Boeing hurt the Dow index, losing $1.87 to $65.10 on disappointment over its earnings.
* Health maintenance organization shares tumbled for a second day. The stocks were hit Tuesday after Coventry Health trimmed its earnings outlook for 2006. Coventry, down $7.57 on Tuesday, fell $1.44 to $51.15.
Also sliding were WellPoint, down $4.37 to $71.72; Aetna, down $3.20 to $81.70; and Health Net, off $2.03 to $46.28.
