Indexes posted moderate losses Wednesday in the face of earnings jitters, a weaker dollar and spiking oil prices.
The NYSE composite ended 0.8% lower while the Nasdaq slipped a full 1.1%, according to preliminary figures.
Transportation stocks were hit hard by oil prices and disappointing results from UPS (). The Dow transports fell 3.5%. UPS shares fell 2.74 to 70.57, contributing to the S&P 500’s 0.8% decline.
Boeing () rose 3.58 to 78.60 on the biggest volume jump among Dow components, despite announcing yet another delay for the launch of its 787 Dreamliner. The Dow lost 0.4%.
Small caps were under heavier selling, with the S&P 600 off 1.9%.
Trading rose on both exchanges, according to early readings. That would give the market a distribution day, the second since the March 20 follow-through.
The ratio of declining to advancing issues eased from 5-to-1 to 3-to-1 by the end of the session.
Energy and fertilizer stocks turned in some of the day’s best performances.
So did Russia-based steel producer Mechel (), which jumped 12.78 to 142.88 after announcing its $221 million purchase of Romanian steel maker Ductil Steel. Mechel shares are in buying range on a pullback to their 10-week moving average line.
Focus Media Holding () dropped 2.41 to 34.64. The China-based advertising firm has been digging deeper below its 10- and 40-week moving averages since February.
3:15 p.m. Update: Comeback Fades In Late Trading
By VINCENT MAO
Stocks hovered near their worst levels of the session late Wednesday. A rebound attempt just after the midday was short-lived after more bleak news in the financials.
At 2:46 p.m. EDT, the Nasdaq was down 1.4%, the S&P 500 1%, the NYSE composite 0.9% and the Dow 0.7%.
Turnover was tracking just about unchanged from yesterday’s levels at this time on the NYSE, but higher on the Nasdaq, putting the composite on pace for a distribution day.
Declining stocks led advancers by 5-to-2 on the NYSE and by nearly 3-to-1 on the Nasdaq. The put-call volume ratio spiked above 1.0, a sign of heightened fear among investors.
Goldman Sachs () and Morgan Stanley () dropped 3% each on news that their amount of riskier assets increased as a percentage of total assets from the prior quarter.
Merrill Lynch () fell 0.55 to 46.25. It was off session lows of 45.51. According to CNBC, the company may write down as much as $6.5 billion in the current quarter. But the write-downs are not entirely tied to subprime investments. Merrill reports Q1 earnings on April 17. Analysts are expecting a loss of $1.69 a share.
Oil stocks continued to push ahead as crude swelled to $112.21 a barrel.
SandRidge Energy () gained 1.54 to a record high of 41.66 in fast trade. Shares of the oil and gas producer came public in November at 26 each. The company’s sales growth ranged from 71% to 78% in the prior four quarters. But its profit growth has been a mixed bag.
National Oilwell Varco () gained 2 to 69.83 on brisk volume. The maker of oil and gas equipment continued to push ahead after finding support at its 200-day moving average Tuesday. It reports earnings on April 30.
1:15 p.m. Update: Volume Picks Up As Losses Deepen
BY VINCENT MAO
Stocks piled on losses in midday trade Wednesday on worries over corporate profits and record-high oil prices.
At 12:46 p.m. EDT, the Nasdaq dropped 1.1%, the S&P 500 0.8%, the NYSE composite 0.7% and the Dow 0.6%.
Volume was now tracking higher across the board. Decliners outpaced advancers by just over 2-to-1 on both exchanges.
May crude swelled $2.80 to $111.30 a barrel after the Energy Information Administration reported a larger-than-expected drop in supplies. Earlier, oil touched a high of $111.43.
Airlines and other transportation groups backpedaled. Oil-related and gold groups gained.
Layne Christensen () tumbled 3.05, or 7%, to 40.93 in heavy trade. Morgan Joseph cut the provider of drilling and construction services to hold from buy on valuation. On Tuesday, Layne leapt 22% after it posted Q4 earnings well ahead of views.
Syngenta () gave up 1.66 to 59.22 in fast trade. The Swiss maker of crop protection products is pulling back after ramping out of a pullback to its 10-week moving average on heavy volume last week.
On the upside, Atwood Oceanics () ascended 3.69 to 100.78 in fast trade. The offshore drilling contractor is now just 1% past a 99.81 buy point of a deep handle. In a sign of strength, the stock’s Relative Strength line is already at a new high ahead of price.
Apache () rallied 3.41 to a record high of 133.41. That puts the oil and gas giant 11% past a 120.66 buy point from a pullback to its 10-week moving average. The firm’s profit growth accelerated from 6% to 79% in the past two quarters. Growth is slated to ramp up 93% in the current quarter. UBS reiterated a buy rating on the stock.
11:15 a.m. Update: Indexes Hold To Lows As Volume Turns Mixed
By ALAN R. ELLIOTT
Weak economic data and reports of further airline flight cancellations for safety inspections tamped down market confidence Wednesday morning.
The NYSE composite had lost 0.3%, and the Nasdaq was off 0.6% at 10:54 a.m. EDT.
Transportation issues weighed heavily on both exchanges, with the Dow transports down 1.9%. Small and midcaps slipped ahead of big caps. The S&P 600 edged 0.5% lower vs. a 0.2% loss for the S&P 500 and a 0.1% decline on the Dow. Utilities and insurance segments showed strength and the NYSE’s energy index added 1.2%.
Volume turned mixed, up slightly on the Nasdaq and somewhat lower on the NYSE.
Red ink girdled the globe, with markets trading lower around the world.
The Shanghai composite ripped 5.5% lower, primarily on concerns that the government was set to tighten monetary liquidity and further boost the yuan in order to to rein in inflation. Hong Kong markets rode the mainland market’s coattails, with the Hang Seng index slipping 1.5%. Tokyo’s Nikkei 225 dipped 1.1%, hit by economic worries and a sell-off of real estate stocks.
Stocks in Europe and the U.K. took a less severe slip, buoyed by energy stocks and soft trading ahead of an interest rate decision by the Bank of England. London’s FTSE 100 nipped just a fraction lower. The CAC-40 in Paris shaved off 0.3% and the DAX in Frankfurt was down 0.4%.
Inventories data showed a higher-than-expected 1.1% gain in February, indicating wholesaler sales continued to slow. The increase followed a revised 1.3% gain for January, and suggested wholesalers were likely to place fewer orders as on-hand supplies built against slowing sales.
Oil inventories declined 3.1 million barrels, their first down week since February and only their second lower reading this year. Gasoline inventories slipped for a fourth week, down by 3.4 million barrels. Refinery activity also picked up, with capacity inching above 83%, its highest level since February. May crude futures turned and rose 83 cents to $109.33 a barrel.
Decliners led advancing stocks by about 3-to-2 on both exchanges, but most leading stocks were managed to dodge the downside.
Transocean () limited the S&P 500’s dip, adding 4.06 to 147.91. The company announced it would report Q1 results May 7. Analysts expect earnings growth to slow from triple digits to 33%. The company topped Q4 views by 33%. Shares on April 4 cleared a 145.07 buy point on a cup-with-handle base.
Solar energy component maker First Solar () troweled on another 6.29 to 278.28. The stock is holding near highs, 18% above a 236.67 buy point after an April 1 breakout from a cup-with-handle base.
10:15 a.m. Update: Stocks Fall In Light Trade
By VINCENT MAO
Gains from a higher open quickly faded Wednesday, as stocks fell into negative territory.
At 9:55 a.m. EDT, the Nasdaq lost 0.4%. The S&P 500 and NYSE composite were each down 0.3%. The Dow eased only 0.1%, thanks to support from shares of Boeing (), which cruised up 4%.
Volume was tracking lower across the board.
Greenbrier Companies () gapped down and lost 0.72 to 25.71 . The railcar maker reported Q2 earnings of 9 cents a share, well below views of 33 cents. Profit was hurt by a charges related to a plant closing.
Aluminum Corp. of China () dropped 2.11, or 5%, to 41.49 and sliced its 50-day moving average. The stock had been trying to recover from a 64% correction from its October peak.
On the upside, fertilizer makers continued to pile up gains.
CF Industries Holdings () moved up 4.59 to a new peak of 135.61. The company has delivered triple-digit profit grow for the past three quarters. Another is expected in the current period.
Potash Corp. of Saskatchewan () rallied 2.85 to 179.91, also a new high. It reports Q1 results on April 24. Analysts see profit more than doubling to $1.47 a share on sales of nearly $1.7 billion.
Elsewhere, GrafTech International () gapped up and rallied 1.58 to 18.60 in fast trade. Oppenheimer & Co. upgraded the maker of carbon and graphite products to outperform from perform and set a target price of 24.
9:15 a.m. Update: Stocks Poised For Mildly Higher Open
By VINCENT MAO
Stock futures pointed to a slightly higher open Wednesday despite worries about corporate earnings. Nasdaq futures rose 2 points vs. fair value, S&P 500 futures edged up a fraction of a point and Dow futures climbed 20 points.
UPS () dropped 4% in the pre-market after it cut its Q1 outlook. Citing decreased volume, higher fuel costs and a weak economy, the world’s largest shipping firm said late Tuesday that it now expects first-quarter profit of 86 cents or 87 cents a share. That’s down from a prior range of 94 cents to 98 cents and below views of 93 cents.
UPS group mate FedEx () slipped 1% in the pre-open.
FormFactor () stumbled 8% in the pre-market following a number of negative developments. Due to weakness in the DRAM memory market, the chip equipment maker lowered its Q1 forecasts. FormFactor expects losses to extend beyond it previous range of 15 cents a share to 25 cents. Revenue is pegged at $65 million to $66 vs. a prior outlook of $70 million to $80 million. It also will slash about 12% off its work force.
On the bright side, Citigroup () rose 2% in the pre-market on news that it might be close to selling $12 billion of leveraged loans and bonds to a consortium of investors. According to reports, the sale would to be private equity firms Apollo Group, Blackstone Group () and TPG at slightly below 90 cents on the dollar. Citigroup reports earnings April 18. It’s expected to lose 95 cents a share.
Boeing () gained 2% in the pre-market despite news of another delay for its 787 Dreamliners. Citing slower-than-anticipated completion of work, the Dow component pushed back the delivery of its new plane to the third quarter of 2009 instead of the first.
Data on February wholesale inventories will be out at 10 a.m. EDT. A 0.5% rise is expected.
Crude oil eased 25 cents to $108.25 ahead of the weekly energy inventories report at 10:30 a.m. EDT.