Stocks turn lower a day after the S&P 500 hit a record high
NEW YORK (AP) — Stocks turned lower in late trading on Wall Street Wednesday, handing the S&P 500 a loss a day after it closed at a record high. The day-earlier gain wiped out the last of the index’s losses created by the pandemic and surpassed its Feb. 19 peak. Stocks started to fade in the afternoon after the Federal Reserve released minutes from its latest policy meeting. The market’s momentum has remained solid, but it’s slowed recently after roaring back from a nearly 34% plummet in February and March. Apple’s market value briefly topped $2 trillion, the first time a U.S. company has passed that threshold.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story appears below.
Stocks are drifting between small losses and gains on Wall Street Wednesday, as the S&P 500 follows up its return to a record high with another day of meandering trading.
The S&P 500 was virtually unchanged in afternoon trading, a day after it wiped out the last of its losses created by the pandemic and surpassed its Feb. 19 peak.
The Dow Jones Industrial Average was up 54 points, or 0.2%, at 27,832, as of 3:09 p.m. Eastern time, and the Nasdaq composite was 0.1% lower.
The market’s momentum has remained solid, but it's slowed recently after roaring back from a terrifying plummet of nearly 34% in February and March. Trading has been so tepid that it took the S&P 500 several attempts to break its record after pulling within 1% of the mark a week and a half ago.
“The elevator went down very quickly, so to speak,” Nancy Davis, chief investment officer of Quadratic Capital, said of the market's plunge earlier this year. “And now we’ve been climbing the stairs back up, and we’re higher than we were before.”
This is a traditionally slow time of the year for stocks, and the market is also still in wait-and-see mode on several fronts.
Investors still seem to believe that Congress and the White House will reach a deal to deliver more aid to the economy after federal unemployment benefits and other stimulus expired. Democrats and Republicans have been stuck at an impasse and sniping back and forth, but a GOP senator said Tuesday that Senate Republican leaders are preparing a slimmed-down coronavirus relief package. House Speaker Nancy Pelosi also told fellow Democrats she’d continue seeking a broader economic relief bill.
Beyond Capitol Hill, investors are also waiting for more developments on the rising tensions between the United States and China. The world’s largest economies have longstanding trade issues, and President Donald Trump has recently been targeting Chinese tech companies in particular. Trump said Tuesday that he postponed trade talks with China scheduled for last weekend because “I don’t want to deal with them right now.”
Also hanging over the market is the upcoming U.S. election, with the big changes in tax and other policies that it can create. Democrats formally nominated Joe Biden late Tuesday to run against Trump for the White House in November's election.
Earnings reporting season for big U.S companies has nearly wrapped up, with businesses in the S&P 500 on track to report a sharp decline in their profits for the spring, but not as bad as Wall Street expected. More than 93% of the earnings reports are in, and the index is on pace for a roughly 33% drop from the prior year.
Target jumped 12.7% for the biggest gain in the S&P 500 after it reported results for the spring that easily beat Wall Street’s expectations.
But TJX, the operator of T.J. Maxx and Marshalls, slumped 5.8% after its results fell short of analysts’ forecasts.
Apple continued its run of dominance and rose 0.8%. Earlier in the day, its total market value briefly topped $2 trillion, the first time a U.S. company has crossed that threshold. Apple's stock has soared nearly 60% this year, despite the pandemic, as loyal customers snap up its products even if they can't go to a store to test them out.
Stock indexes slipped momentarily in the afternoon after the Federal Reserve released the minutes from its last policy meeting. The central bank has been one of the main pillars propping up the market after it slashed short-term interest rates to their record low and essentially promised to buy as many bonds as it takes to keep markets running smoothly.
The economy is showing some signs of improvement, but not enough to get the Fed to pull back on its aid for the economy. At least, that’s the fervent hope for investors, because low interest rates can act like rocket fuel for markets.
The Fed’s minutes showed again that policy makers are finding it very difficult to forecast the path of the economy, which will depend greatly on what happens with the virus.
The yield on the 10-year Treasury held steady at 0.67%, after rallying back from 0.64% earlier in the morning. Treasury yields have been generally rising in recent weeks, though they’re still very low and haven’t rallied anywhere close to the degree the stock market has.
“All else being equal, you would want yields to be rising here to endorse what’s happening with stocks,” said Willie Delwiche, investment strategist at Baird. “Stocks are looking for an economic recovery, but bond yields are saying ‘hold on a minute, maybe not so fast.’”
In European stock markets, the German DAX returned 0.7%. The French CAC 40 rose 0.8%, and the FTSE 100 in London added 0.6%.
In Asia, Japan’s Nikkei 225 rose 0.3%, and South Korea’s Kospi gained 0.5%. Stocks in Shanghai slumped 1.2%, and the Hang Seng in Hong Kong lost 0.7%.
Benchmark U.S. crude oil rose 4 cents to settle at $42.93 per barrel. Brent crude, the international standard, fell 9 cents to $45.37 a barrel.
AP Business Writer Elaine Kurtenbach contributed.