Stocks give up early gains and end mixed on Wall Street

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.

FILE – In this Dec. 13, 2019, file photo trader Sal Suarino works on the floor of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EST on Wednesday, Jan. 29, 2020. (AP Photo/Richard Drew, File)

The wobbly finish left the benchmark S&P 500 with a 0.1% loss. The Dow Jones Industrial Average closed with a gain of less than 0.1%, while the Nasdaq composite inched 0.1% higher. 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 quartely results after the closing bell, which sent its shares 11% higher in after-hours trading. The electric vehicle maker’s stock had already closed at an all-time high during the regular trading session.

Stocks barely budged after Federal Reserve announced 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.”
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.

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, which has infected more than 6,000 in mainland China and abroad, 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.

Last year, the Fed cut its benchmark interest rate three times after having raised it four times in 2018. Powell credits those rate cuts with revitalizing the housing market, which had stumbled early last year, and offsetting some of the drag from President Donald Trump’s trade war with China.

Losses in communication services, energy and health care stocks outweighed gains by technology, industrial and utilities companies Wednesday.

A report that Americans pulled back on signing contracts to buy homes last month dragged down homebuilder stocks. PulteGroup fell 1.8% and Hovnanian Enterprises dropped 3.7%.

Apple rose 2.1% after a strong holiday 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 fourth-quarter 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% following 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 Thursday, when Coca-Cola, UPS, Amazon and Visa are scheduled to release results. Caterpillar and Exxon Mobil will report results on Friday.

Benchmark crude oil fell 15 cents to settle at $53.33 a barrel. Brent crude oil, the international standard, rose 30 cents to close at $59.81 a barrel. Wholesale gasoline rose 3 cents to $1.53 per gallon. Heating oil declined 2 cents to $1.70 per gallon. Natural gas fell 6 cents to $1.87 per 1,000 cubic feet.

Gold rose 60 cents to $1,570.40 per ounce, silver rose 5 cents to $17.45 per ounce and copper fell 3 cents to $2.55 per pound.
The dollar fell to 109.06 Japanese yen from 109.14 yen on Tuesday. The euro strengthened to $1.1020 from $1.1017.

European markets finished higher. Asian markets were mixed. Hong Kong’s Hang Seng fell 2.8% after its markets reopened from Lunar New Year holidays, while other Chinese markets remained closed.

GSG