Stocks take a late turn lower for second straight day of losses
Stocks fell broadly on Wall Street on Wednesday, sending the S&P 500 to its second straight loss after a five-day winning streak.
The benchmark index fell 1.1%, its biggest decline since mid-July. The selling accelerated in the final hour of trading, with technology, health care, financial and industrial companies weighing down the index the most.
Only the index’s consumer discretionary sector, which includes a mix of companies that rely on consumer spending, rose as investors bid up shares in Lowe’s and other big retailers that reported better-than-expected quarterly results. Even so, the S&P remains within 80 points of its alltime high set on Monday.
The market didn’t react much initially to the afternoon release of the minutes from the Federal Reserve’s latest policy meeting, which confirmed central bank policymakers have made no firm decision about when to start unwinding their support measures for the economy, which has been steadily recovering from the pandemic recession.
The surge this summer of virus cases because of the highly contagious delta variant hangs over the broader market and is blurring the view on the economy’s continued recovery. The path of the virus and its impact on consumer spending and job growth could be a factor in the Fed’s decision.
“We’re having a pretty cautious week for the most part,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “A lot of the people who were optimistic that reopening would happen quickly are obviously disappointed, but
we’re looking at what’s happening with the delta variant as more of a setback, not a change in direction.”
The S&P 500 index fell 47.81 points to 4,400.27. The Dow Jones Industrial Average slid 382.59 points, or 1.1%, to 34,960.69. The Nasdaq composite lost 130.27 points, or 0.9%, to 14,525.91.
Small company stocks also fell, sending the Russell 2000 index down by 18.39 points, or 0.8%, to 2,158.78.
The yield on the 10-year Treasury note rose to 1.27% from 1.25% late Tuesday.
The minutes from the Federal Reserve’s policy meeting last month, released at 2 p.m. Eastern, showed Fed officials discussed the idea of beginning to taper the Fed’s extraordinary support for the U.S. economy later this year, though they stopped short of a firm decision on a timetable.
They also concluded that the economic recovery from the pandemic recession was moving closer to achieving the central bank’s goals on inflation and employment. As a result, the Fed is edging toward an announcement that it will begin paring the pace of its Treasury and mortgage bond buying, which amounts to $ 120 billion per month. These purchases have been intended to lower longer-term interest rates and encourage borrowing and spending.
Beyond watching the Fed, investors sized up quarterly report cards from retailers, which are among the last industries to issue results this earnings season.
Lowe’s Cos. jumped 9.6% for the biggest gain in the S&P 500 after the home improvement chain gave investors a strong sales forecast. TJX Cos. rose 5.6% after the parent of T.J. Maxx, Marshalls and other stores beat analysts’ second-quarter profit and revenue forecasts.