Stocks end day mixed after technology gains wane
Major U.S. stock indexes ended mixed Wednesday after an early rally powered by strong gains in technology companies faded in the final minutes of trading.
The S&P 500 index fell 2.84 points, or 0.1%, to 3,273.40. The index had earlier been up by 0.5%.
The Dow edged up 11.60 points, or less than 0.1%, to 28,734.45. The Nasdaq added 5.48 points, or 0.1%, to 9,275.16. The Russell 2000 index of smaller company stocks slid 9.09 points, or 0.5%, to 1,649.22.
Bond prices rose, pulling yields lower.
Investors continued to assess quarterly reports from big companies, including solid results from General Electric and Apple. The iPhone maker’s shares climbed to an all-time high. Microsoft reported quarterly results after the close of regular trading that topped Wall Street estimates.
Tesla also reported strong quarterly results after the closing bell, which sent its shares 11% higher in afterhours trading. The electricvehicle maker’s stock had already closed at an all-time high during the regular trading session.
Stocks barely budged after the Federal Reserve announced that it is leaving its benchmark interest rate unchanged at a low level. The move, which was widely expected, reflects the central bank’s mostly positive view of the U.S. economy.
“They seem to have gotten the porridge temperature just about right,” said Tom Martin, senior portfolio manager with Globalt Investments. “Inflation isn’t budging one way or the other — same thing with unemployment, same thing with wage growth.”
Gainers and losers closed nearly even on the New York Stock Exchange.
The Dow, S&P and Nasdaq are on track to end January with gains.
Bond prices rose. The yield on the 10-year Treasury fell to 1.58% from 1.64% late Tuesday.
Despite a rally Tuesday, stocks have been mostly pulled lower this week amid investor jitters over the outbreak of a new virus in China. The virus remains a potential threat to the global economy.
Speaking to reporters Wednesday afternoon, Federal Reserve Chairman Jerome Powell acknowledged that there’s a risk the outbreak could slow the global economy.
Turning to interest rates, the central bank said it would hold short-term rates in a range of 1.5% to 1.75%, far below levels that were typical during previous expansions. Powell and other Fed officials have indicated that they see that range as low enough to support faster growth and hiring.
Losses in communication services, energy and health care stocks outweighed gains by technology, industrial and utilities companies Wednesday.
Apple rose 2.1% after a strong Christmas season helped propel profits beyond Wall Street forecasts. The iPhone maker’s surprisingly good report marks a turnaround from a year ago when sales of its marquee product appeared to be sliding. The company is also seeing gains in sales of smartwatches, digital services and wireless earbuds.
General Electric surged 10.3% after a strong showing from its aviation business pushed profits above expectations.
Norfolk Southern climbed 4.9% after the railroad reported surprisingly good fourthquarter profits following cost cuts. The railroad industry has been experiencing weak demand for freight hauling, and the company is trying to operate on a tighter schedule and move more freight with fewer people.
Union Pacific rose 1.2%, and CSX climbed 1.7%.
Traders bid up shares in L Brands 12.9% after reports that the owner of Bath & Body Works and Victoria’s Secret could change leadership and sell off some of its parts. The Wall Street Journal reported that Leslie Wexner, who has served as CEO for more than five decades, is in talks to step down. It also said the company is considering a full or partial sale of its lingerie business.
Wall Street’s busy week of company earnings reports continues today, when CocaCola, UPS, Amazon and Visa are scheduled to release results. Caterpillar and Exxon Mobil are to report results Friday.