US stocks ended flat to slightly lower yesterday after bellwether FedEx cut its profit forecast and investors pulled back after last week’s rally on central bank stimulus.
Falling oil prices weighed on the market for a second day, with the S&P 500 energy index, down 0.7 per cent, the day’s biggest decliner among the S&P’s sectors.
The Standard & Poor’s 500 remains up 5.3 per cent since the end of July. The benchmark index reached levels not seen in nearly five years last Friday, a day after the Federal Reserve’s unveiling of its plan to undertake a third round of stimulus.
The Fed’s announcement followed the European Central Bank’s statement that it would buy bonds to support struggling Eurozone economies.
“We’ve gotten to the point where price momentum was such the market averages were overextended at the end of last week,” said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon. “Now we have this quiet period.”
Shares of FedEx fell 3.1 per cent to $86.55. The Dow Jones transportation average lost 1.1 per cent. FedEx cut its profit forecast for its fiscal year 2013, saying that a weakening world economy had prompted customers to shift toward lower-priced shipping.
Estimates for the third-quarter S&P 500 companies’ profits have fallen sharply in recent months, and earnings now are expected to decline 2.2 per cent from a year ago, according to Reuters data. It would be the first such decline in three years.
Apple, which broke sales records with its new smartphone, provided some support to the market. Apple’s stock set another all-time high at $702.33 before ending at $701.91, up 0.3 per cent.
The Dow Jones industrial average gained 11.54 points, or 0.09 per cent, to end at 13,564.64. The Standard & Poor’s 500 Index dipped 1.87 points, or 0.13 per cent, to finish at 1,459.32. The Nasdaq Composite Index edged down 0.87 of a point, or 0.03 per cent, to end at 3,177.80.
Weighing on the tech sector were shares of Advanced Micro Devices, which tumbled 9.7 per cent to $3.62 a day after the company said its chief financial officer was leaving the struggling personal computer chipmaker. The PHLX semiconductor index lost 0.4 per cent.
Economic data, however, offered a fresh sign of momentum for the housing market. US homebuilder sentiment rose for the fifth month in a row in September to its highest level in over six years, the National Association of Home Builders said.
The PHLX housing sector index, however, was down 0.8 per cent.
Volume was lower than average for a second straight day. Many participants were out Monday and yesterday for the observance of Rosh Hashana, the Jewish New Year.