THE DOW and the Nasdaq lost ground yesterday as minutes from the Federal Reserve’s June meeting showed policymakers are open to the idea of more economic stimulus, but that conditions might need to worsen first.
The S&P 500 ended unchanged, breaking a four-day losing streak, after paring losses into the close. Technology and industrials led the S&P’s losers, as the market was hit by a number of high-profile earnings warnings in recent days.
Investors were hoping the Fed’s June minutes would suggest the central bank was getting closer to another round of stimulus. The lack of clues prompted selling in all three major indexes, though stocks pared losses just ahead of the close.
The Nasdaq was the worst performer of the three major indexes. Network gear maker Adtran warned about third-quarter revenue, driving its stock down 15.4 per cent to $23.01 and hitting shares of its rivals. Juniper Networks fell 1.1 per cent to $14.68, and Ciena lost 7.9 per cent to $14.15.
The warning followed weaker forecasts earlier this week from chipmakers, including Advanced Micro Devices. Its stock slid two per cent to $4.89 yesterday.
Some analysts expect earnings disappointments from major technology companies this earnings season. They say estimates for tech names are likely to go down.
The Dow Jones industrial average shed 48.59 points, or 0.38 per cent, to end at 12,604.53. The Standard & Poor’s 500 Index dipped just 0.02 of a point to finish at 1,341.45. The Nasdaq Composite Index slipped 14.35 points, or 0.49 per cent, to close at 2,887.98. It was a fifth day of losses for the Dow.
Helping to support the S&P 500 were financials, which gained after four days of losses. The financial index was up 0.8 per cent.
Some banks, including JPMorgan Chase, up one per cent at $34.59, are due to report results on Friday.
Other earnings warnings included Hhgregg, an appliance and consumer electronics retailer, which forecast a wider-than-expected loss for the first quarter and cut its full-year outlook.
Its stock sank 36.4 per cent to $7.34. Rival Best Buy slumped 8.4 per cent to $19.37.
Among the day’s economic data, the US trade deficit narrowed by 3.8 per cent in May, helped by a rise in exports, including those bound for Europe and China. But economists warned it might not last.
After the close, shares of hotel chain Marriott International dipped 0.5 per cent to $37.84 following the release of its results.
Volume was lighter than average. About 6.02bn shares changed hands on the New York Stock Exchange, the Nasdaq and Amex, compared with the year-to-date daily average of 6.85bn shares.