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Stocks rally, wobble, then end down as turbulence continues

The New York Stock Exchange.
(Spencer Platt / Getty Images)

It was another shaky day on Wall Street as indexes rallied in the morning, bobbed up and down for much of the day, then sank in the last few minutes of trading. Energy companies dropped along with oil prices. Technology companies also declined.

Stocks were coming off Tuesday’s big gain. At times, investors looked ready to jump back in after steep losses Friday and Monday, yet every gain the market made Wednesday was met with more selling. About 20 minutes before the close of trading, the Dow Jones industrial average was up more than 260 points, but it finished with a small loss.

After two steep plunges, including its worst loss in 6 1/2 years Monday, the S&P 500 is down 6.7% from its record high set Jan. 26.

Markets were noticeably calmer Wednesday, but there are signs that investors are still far more nervous than they were just a few days ago. The VIX, known as Wall Street’s fear gauge because it measures how much volatility investors expect in the future, is at 27, more than double where it was two weeks ago. It spiked above 50 early Tuesday.

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“The markets had blinders on,” Invesco chief global markets strategist Kristina Hooper said. “I thought it was almost alarming that markets weren’t considering that, for example, we have a different [Federal Reserve] in 2018 that could be more hawkish.”

Stocks tumbled Friday after the Labor Department said workers’ wages rose in January at their fastest pace in eight years. That wage growth is good for the economy, but Hooper noted that higher pay to workers can reduce corporate profits, and those profits are the stock market’s fuel. And while higher pay affects company profits quickly, it can take a long time for workers to start spending more money after they get a raise.

The Standard & Poor’s 500 index ended Wednesday down 13.48 points, or 0.5%, at 2,681.66. The Dow slipped 19.42 points, or 0.1%, to 24,893.35. The Nasdaq composite fell 63.90 points, or 0.9%, to 7,051.98. Smaller companies fared better than the rest of the market, and more stocks rose than fell on the New York Stock Exchange.

The gap between the Dow’s highest and lowest levels Wednesday was about 500 points, or 2%. That swing was big, but it was dwarfed by the lurching moves the market made during the last few days.

Although investors still may be uncertain about where stocks are going, they’re not rushing for cover in ultra-safe investments such as bonds. Bond prices fell, sending yields higher. The yield on the 10-year Treasury note, a benchmark for mortgages and other kinds of loans, rose to 2.84% from 2.81%.

Other safer-play investments also fell. The price of gold dropped $14.90, or 1.1%, to $1,314.60 an ounce. Silver fell 34 cents, or 2.1%, to $16.24 an ounce.

Precious metals prices often rise when the market hits a rough patch. They climbed in December and January but have decreased over the last few days.

Global markets mostly rose and appeared calmer Wednesday. Germany’s DAX was up 1.6%, the British FTSE 100 index rose 1.9%, and the CAC 40 in France picked up 1.8%. Hong Kong’s Hang Seng fell 0.9%. Japan’s Nikkei 225 stock average rose 0.2%. The Kospi in South Korea fell 2.3%.

The biggest technology companies fared the worst. Apple fell 2.1% to $159.54. Facebook slid 2.8% to $180.18. Alphabet, Google’s parent company, retreated 2.7% to $1,055.41.

Wynn Resorts jumped 8.6% to $177.32 after Steve Wynn resigned as chairman and chief executive. The Wall Street Journal reported last month that a number of women accused Wynn of sexual harassment or assault, and it said Wynn paid $7.5 million to settle one such case. Wynn has denied the accusations but said he could not be effective in his corporate positions in the face of those allegations. Wynn stock has fallen 11.6% since the Journal’s report.

Energy companies fell as oil prices sank. Benchmark U.S. crude dropped $1.60, or 2.5%, to $61.79 a barrel in New York. Brent crude, the international standard for oil prices, fell $1.35, or 2%, to $65.51 a barrel in London. That came after the U.S. government said oil production jumped last week, raising concerns about an increase in the supply of crude. Supplies of gasoline and diesel also rose.

Newspaper publisher Tronc soared 19.1% to $21.55 after it agreed to sell the Los Angeles Times and San Diego Union-Tribune to Patrick Soon-Shiong, a major Tronc shareholder and former board member.

Who is Patrick Soon-Shiong? An L.A. billionaire with big ideas — and mixed achievements »

Snap, the parent of disappearing-message app Snapchat, vaulted 47.6% to $20.75 after it reported strong user growth and greater-than-expected revenue in the fourth quarter. The stock went public last March; shortly after its initial public offering, it traded above $29 a share.

Snap surges after reporting strong earnings and user growth »

In other commodities trading, wholesale gasoline fell 4 cents to $1.77 a gallon. Heating oil fell 5 cents to $1.93 a gallon. Natural gas slid 6 cents to $2.70 per 1,000 cubic feet. Copper fell 10 cents, or 3.2%, to $3.09 a pound.

The dollar edged up to 109.42 yen from 109.33 yen. The euro fell to $1.2276 from $1.2392.


UPDATES:

2:40 p.m.: This article was updated with closing prices, context and analyst comment.

8:05 a.m.: This article was updated with market prices and context.

This article was originally published at 6:55 a.m.


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