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Modest rally for stocks is mostly gone by the closing bell

Wall Street
The Standard & Poor’s 500 index and Dow Jones industrial average finished Wednesday with tiny losses that left them just below their all-time highs set Tuesday.
(Mark Lennihan / Associated Press)

A last-minute burst of selling pulled major U.S. stock indexes mostly lower Wednesday, ending the market’s five-day winning streak.

The Standard & Poor’s 500 index and Dow Jones industrial average finished with tiny losses that left them just below their all-time highs set a day earlier. The S&P 500 fell 1.38 points, or less than 0.1%, to 3,191.14. The Dow dropped 27.88 points, or 0.1%, to 28,239.28. The Nasdaq composite rose 4.38 points, or 0.1%, to 8,827.73, a record.

Trading was listless most of the day in the absence of major new economic data and only a few corporate earnings reports for investors to mull over. Stocks have jumped recently on optimism about a phase one trade deal announced last week between the United States and China, among other factors. But after five straight days of gains, the S&P 500 had less fuel to push higher.

“The market doesn’t seem like it’s stretched, so it’s not surprising that we’re seeing it kind of slowly moving up higher,” said Veronica Willis, investment strategy analyst at Wells Fargo Investment Institute. “But I would not be surprised to see a little bit of profit-taking as we’re getting these record highs.”

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Losses in banks, industrial stocks, household goods makers and technology companies helped pull the market lower. They offset gains in real estate, communication services, healthcare and elsewhere in the market.

Treasury yields rose slightly. The yield on the 10-year Treasury climbed to 1.92% from 1.89% late Tuesday.

Despite the last-minute dip, stocks are on track for strong gains this year. The benchmark S&P 500 is up 27.3%, while the Dow is up 21.1%. The Nasdaq, which is heavily weighted with technology stocks, is up 33%.

Stocks have been mostly hovering near their recent all-time highs this week. Investors have appeared content this week to hold on to their gains from a fall runup in the market. Traders have drawn encouragement from steps by the U.S. and China to de-escalate their trade conflict, including reaching a limited deal on trade Friday.

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For now, at least, the pact has helped ease a key source of uncertainty for investors heading into next year.

Traders had their eye on a mixed batch of corporate earnings reports Wednesday.

FedEx was the biggest loser in the S&P 500 after the package delivery giant cut its profit forecast for its fiscal year and reported weaker quarterly earnings than analysts expected. The company cited “weak global economic conditions” and higher expenses. The stock slumped 10%. FedEx’s woes also pulled rival UPS 1.9% lower.

General Mills added 1.9% after it reported stronger profit for the latest quarter than analysts expected. The company behind Haagen-Dazs ice cream and Yoplait yogurt said its sales were flat from a year earlier, which was a touch weaker than analysts expected, but it made more in profit from each $1 in sales than Wall Street forecast.

Cigna climbed 2.4% after the company agreed to sell its group life and disability coverage business for $6.3 billion.

Several department store chains also notched solid gains. Macy’s rose 3.1%, L Brands climbed 3.3% and Nordstrom picked up 3%.

Benchmark crude oil fell 1 cent to $60.93 a barrel, snapping a five-day winning streak. Brent crude oil, the international standard, rose 7 cents to $66.17 a barrel.

Gold fell $2.00 to $1,472.60 an ounce and silver fell 3 cents to $16.95 an ounce.

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The dollar rose to 109.60 Japanese yen from 109.49 yen Tuesday. The euro weakened to $1.1115 from $1.1147.


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