Wall Street takes a step back; Fed minutes on deck
U.S. stocks slipped in a choppy session on Wednesday, struggling to sustain a rally from the previous session, as IBM snapped a run of strong blue-chips earnings and disappointing housing data dragged down Home Depot and homebuilders.
Helping temper losses was a rise in Netflix on strong subscriber numbers and a 1.33 percent gain in financial stocks ahead of the release of the minutes of the Federal Reserve`s September policy meeting at 2:00 p.m. ET (1800 GMT).
Investors have been fretting over the impact of tariffs, rising interest rates and wages on corporate profits and those concerns sparked a selloff last week.
The markets have lost steam after hitting record highs in the past month and a half, notwithstanding a one-off rally on Tuesday on strong earnings. Traders attribute the recent swings to normal volatility and some profit taking ahead of earnings.
"This is normal market volatility. And as tempting as it is to blame the last few days of volatility on something like trade disputes or rising interest rates or fears of growing inflation, those aren`t new concerns," said Scott Clemons, chief investment strategist for Brown Brothers Harriman in New York.
"The pullback we had is nothing more than a flare in volatility that we usually get three or four times a year. It`s just been a long time since we`ve seen it so it seems different but it`s really quite normal."
IBM`s shares slid 6.4 percent after the company`s quarterly revenue fell more than expected.
Home Depot dropped 4.4 percent and Lowe`s Cos fell 3.5 percent after Credit Suisse downgraded the two home improvement retailers due, in part, to a dampening sentiment in the housing market - a weak spot in a robust economy.
Indeed, data on the day showed U.S. homebuilding dropped more than expected in September, while rising borrowing costs knocked mortgage activity last week to its lowest since 2014. That sent the PHLX housing index sliding 1.90 percent.
At 12:49 p.m. EDT the Dow Jones Industrial Average was down 63.98 points, or 0.25 percent, at 25,734.44, the S&P 500 was down 2.53 points, or 0.09 percent, at 2,807.39 and the Nasdaq Composite was down 21.95 points, or 0.29 percent, at 7,623.54.
Among the brighter spots was Netflix, which rose 3.2 percent, though it had pared some early gains, after reporting blowout subscriber addition numbers.
United Airlines shares climbed 5.7 percent after a solid third-quarter profit and again raising it 2018 outlook. That also lifted other airline stocks.
Declining issues outnumbered advancers for a 1.75-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.59-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and 11 new lows, while the Nasdaq recorded nine new highs and 62 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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