Oil sag, wage worries erode rally

NEW YORK — 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.

The Standard & Poor’s 500 index fell 4.02 points, or 0.2 percent, to 2,338.17. It rose as much as 10 points, or 0.4 percent, earlier. The Dow Jones industrial average fell 118.79 points, or 0.6 percent, to 20,404.49. Half of the bluechip index’s losses came from IBM, which reported weakerthan-expected sales in the first quarter.

The Nasdaq composite rose 13.56 points, or 0.2 percent, to 5,863.03 as health care companies climbed. And there were signs of optimism about the economy as well. The Russell 2000 index, which is made up of smaller companies that tend to be more U.S.-focused, added 5.24 points, or 0.4 percent, to 1,367.13 after a late gain a day ago.

Stocks climbed early on 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 around noon as oil prices and energy companies sagged. The losses accelerated after the midafternoon release of the Federal Reserve’s “Beige Book” survey of economic conditions.

The Fed said economic growth continued from midMarch into early April and 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.”

Oil prices slumped after the Energy Information Administration said U.S. crude inventories didn’t shrink as much as investors hoped they would last week and stockpiles are larger than normal for this time of year. Benchmark U.S. crude fell $1.97, or 3.8 percent, to $50.44 a barrel in New York. Brent crude, used to price international oils, fell $1.96, or 3.6 percent, to $52.93 per barrel in London.

All 34 energy companies on the S&P 500 finished lower. Chevron fell $1.45, or 1.4 percent, to $104.23 and Marathon Oil sank 68 cents, or 4.3 percent, to $15.06.

Shares of technology and consulting company IBM slumped after it reported $18.16 billion in revenue in the first quarter, and according to FactSet, that was more than $200 million below analysts’ estimates. IBM stock fell $8.36, or 4.9 percent, to $161.69. It was the second day in a row that a weak report from a single company pulled the Dow sharply lower, as Goldman Sachs did the same on Tuesday.

Bond prices fell, reversing most of their gains from a day earlier. The yield on the 10-year Treasury note rose to 2.21 percent from 2.17 percent.

The price of gold, which has climbed steadily in recent weeks, fell $10.70 to $1,283.40 an ounce. Silver lost 11 cents to $18.16 an ounce. Copper added 1 cent to $2.53 a pound.