US stocks drop after days of big gains
A television on the floor of the New York Stock Exchange features a headline about the shooting in Ottawa, Wednesday, Oct. 22, 2014. US stocks dropped Wednesday following mixed earnings, with the broad market retreating from three straight sessions of big gains. AP PHOTO/RICHARD DREW
NEW YORK–US stocks dropped Wednesday following mixed earnings, with the broad market retreating from three straight sessions of big gains.
The Dow Jones Industrial Average fell 153.49 points (0.92 percent) to 16,461.32.
The broad-based S&P 500 fell 14.17 (0.73 percent) to 1,927.11, while the tech-rich Nasdaq Composite Index lost 36.63 (0.83 percent) at 4,382.85.
Equities spent most of the morning in positive territory, before shifting into the red at midday. Analysts said the pullback was not surprising given that the S&P 500 had surged 4.2 percent in the prior three days.
“After a pretty big S&P rally, at some point there was going to be some pause,” said Michael James, managing director of equity trading at Wedbush Securities.
Dow member Boeing fell 4.5 percent on concerns about high production costs of its signature 787 Dreamliner aircraft even as it reported third-quarter earnings that bested expectations and raised its 2014 earnings forecast.
Yahoo rose 4.5 percent as third-quarter net profit surged to $6.8 billion behind its divestment of shares in Chinese Internet commerce company Alibaba, which netted $6.3 billion.
Cloud computing company VMware slumped 7.1 percent on concerns about its outlook due to lower bookings growth.
Biotech company Biogen fell 5.4 percent as sales of its Tecfidera treatment for multiple sclerosis disappointed. Analysts said safety concerns about the medication could further hit sales.
In non-earnings news, Dow component Johnson & Johnson rose 0.9 percent after announcing it would spend $200 million to accelerate an Ebola vaccine program under development. The pharmaceutical giant plans tests on volunteers in January.
Bond prices fell. The yield on the 10-year US Treasury bond rose to 2.23 percent from 2.21 percent Tuesday, while the 30-year advanced to 3.00 percent from 2.98 percent. Bond prices and yields move inversely.
