Stocks take a breather from record-breaking ways
Stocks sunk in lazy and quiet summer trading as major U.S. equity indexes retreated from record highs and U.S. oil slipped 2.5%.
All three major market gauges rose a tad at the opening but very quickly lost steam. The Dow Jones industrial average, which started the day 0.3% shy of its July 20 record, closed down 0.2%. The broader Standard & Poor's 500 stock index, which kicked off Wednesday a single point shy of Friday's all-time high, finished down 0.3%. And the Nasdaq composite, which notched a record close Tuesday, was off 0.4%.
On the earnings front, there was a lot of activity and movement in individual stocks. Shares of Walt Disney (DIS) were up 1.2% after it topped quarterly profit and sales forecasts and said it was buying a 33% stake in sports streaming service BAMTech.
Luxury retailer Michael Kors (KORS) fell 2.8% after it lowered its sales guidance. Burger chain Wendy’s (WEN) slumped 2.75% after fast-food seller lowered its business projections for future quarters. Yelp (YELP) shares surged 13% after the online review site boosted its revenue guidance and topped profit and revenue in its quarterly profit report.
The "sleepy" stock market is suffering from the summer doldrums. If you strip out the Dow's 191-point surge Friday after the blowout July jobs report, the blue-chip stock gauge has moved just 7 points on average in the past three of four trading sessions.
"The low-volume drifting is not unexpected given the time of year and the fact earnings season is winding down," Andrew Adams, an analyst at Raymond James, told clients in a morning report.
Wall Street is in wait and see mode, and in search of fresh catalysts to propel stocks higher -- at a time when the S&P 500 is trading at above-average valuations relative to history. Indeed, with the second-quarter earnings season winding down, no Federal Reserve meeting until September and investors waiting to see if U.S. economic growth can rebound from its anemic rate of around 1% in the first half of 2016, investors see little reason to mortgage the house on stocks with the market hovering near record levels.
Prices of U.S.-produced oil seesawed, ending down 2.5% to $41.71 a barrel. Last night, crude came under pressure after the American Petroleum Institute said U.S. oil stockpiles rose by a bigger-than-expected amount.
Gold was rising $5.50, or 0.4%, to $1352.20 per ounce. The yield on the 10-year Treasury bond fell to 1.50%, down from 1.55% Tuesday.
Stocks were moderately lower in Europe, with the Stoxx Europe 600 down 0.2%. Shares also closed a tad lower in Asia, with the Nikkei 225 index in Japan falling 0.2% and stocks in mainland China down 0.2%.