Sell-off cuts stocks to mixed close
NEW YORK — A late-day slump left stocks mixed Wednesday as investors couldn’t hold on to their optimism after the Federal Reserve gave an encouraging assessment of the economy.
The Dow Jones industrial average, up more than 150 points after the Fed described the economy as showing more signs of recovery, closed up 30. Broader indexes were narrowly mixed.
Stocks could get a lift Thursday from Cisco Systems, which reported better-than-expected quarterly earnings and sales after the closing bell. John Chambers, chief executive officer of the maker of computer-networking gear, struck an optimistic tone in a conference call with analysts and said orders continue to rebound.
Analysts couldn’t point to any one reason why stocks gave up their gains late Wednesday, although some said the market is nervous as Friday’s release of the government’s October jobs report approaches. Financial stocks fell especially hard in the last hour of trading — after a House vote to speed up the effective date of limits on credit card companies — and added to the overall market’s pullback.
The Fed, as expected, left its benchmark interest rate unchanged at a record low of essentially zero and said the economy is slowly rebounding. Its announcement followed reports earlier in the day on service industries and employment that eased some worries about the economy.
But, as often happens after Fed meetings, stocks were unable to hold their gains. The Fed statement, while more upbeat than in recent months, did note that job losses were continuing.
The House voted to impose new rules on credit card companies unless lenders agree to freeze interest rates and fees. The vote would move up the February effective date of already-enacted legislation that limits what banks can charge for credit cards.
The Dow rose 30.23, or 0.3 percent, to 9,802.14. It had been up as much as 156 after the Fed announcement.
The broader Standard & Poor’s 500 index rose 1.09, or 0.1 percent, to 1,046.50. The Nasdaq composite index fell 1.80, or 0.1 percent, to 2,055.52.
Winning stocks were ahead of losers by 8 to 7 on the New York Stock Exchange, where consolidated volume came to 5.6 billion shares compared with 5.5 billion Tuesday.
Michael Sheldon, chief market strategist at RDM Financial Group in Westport, Conn., said that traders became worried when the S&P 500 index moved below the level of 1,053 — its average of the past 50 days.
“Once it became apparent that the market wasn’t going to close above its 50-day moving average investors sold and moved to the sidelines,” he said.
The ADP National Employment Report said 203,000 private sector jobs were lost last month, down from 227,000 lost in September. The seventh straight month of declining job losses stirred hopes for a better-than-expected employment report Friday.
The dollar fell against other major currencies, helping to send commodities prices higher. Gold rose as high as $1,098.50 an ounce. Crude oil added 80 cents to $80.40 a barrel on the New York Mercantile Exchange.
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