Market Report

Market takes a breather, stocks give up some gains

FILE - A sign for Wall Street hangs in front of the New York Stock Exchange, July 8, 2021. Stocks are off to a mixed start on Wall Street Wednesday, Oct. 27, 2021 a day after the S&P 500 and the Dow Jones Industrial Average set their latest record highs. Several big technology companies were posting solid gains, led by Microsoft, which posted a 24% surge in profits last quarter as its cloud computing business bounded ahead. (AP Photo/Mark Lennihan, file)
FILE - A sign for Wall Street hangs in front of the New York Stock Exchange, July 8, 2021. Stocks are off to a mixed start on Wall Street Wednesday, Oct. 27, 2021 a day after the S&P 500 and the Dow Jones Industrial Average set their latest record highs. Several big technology companies were posting solid gains, led by Microsoft, which posted a 24% surge in profits last quarter as its cloud computing business bounded ahead. (AP Photo/Mark Lennihan, file)

Banks and health care companies helped pull stocks mostly lower Wednesday as the market eased back from its latest record highs.

The S&P 500 fell 0.5% after shedding a modest gain as the selling picked up in the last hour of trading. The Dow Jones Industrial Average dropped 0.7%. Both indexes set all-time highs the day before.

The tech-heavy Nasdaq composite ended essentially flat after an early tech company rally lost steam. Treasury yields were mixed. Energy futures mostly fell.

Investors were focusing on a mixed batch of earnings from a variety of well-known companies, including Microsoft, General Motors and Coca-Cola.

"After some strong days, markets are taking a breather," said Kristina Hooper, chief global market strategist at Invesco. "They're certainly digesting earnings."

The S&P 500 slipped 23.11 points to 4,551.68. More than three-fourths of the companies in the benchmark index fell, with financial, health care and industrial stocks accounting for most of the decline. Those losses offset gains from communication-services stocks and a mix of companies that rely on consumer spending.

The Dow fell 266.19 points, or 0.7%, to 35,490.69. Most of the blue-chip index's stocks were in the red, led by Visa, which slumped 6.9% a day after reporting strong quarterly results.

The Nasdaq edged up 0.12 points, or less than 0.1%, to 15,235.84, and the Russell 2000 index of small companies took the heaviest losses, falling 43.58 points, or 1.9%, to 2,252.49.

Long-term bond yields fell significantly and weighed down banks, which rely on higher yields to charge higher interest rates on loans. The yield on the 10-year Treasury fell to 1.53% from 1.61% late Tuesday. JPMorgan Chase fell 2.1%.

The yield on the 30-year Treasury fell below 2% for the first time in a month to 1.96%, even though rates on shorter-term U.S. bonds, like the 2-year Treasury note, have been rising.

Traders bid up shares in several companies that reported solid quarterly results. Microsoft rose 4.2% after reporting a 24% surge in profits last quarter as its cloud computing business bounded ahead. Google's parent company, Alphabet, rose 5%, eclipsing its previous all-time high set Sept. 1, as a continued rebound in digital ad spending bolstered surprisingly good financial results.

A mix of companies that rely on direct consumer spending also gained ground. Domino's Pizza rose 3.1%. McDonalds rose 2.7% after reporting solid results as an easing of business restrictions helped sales growth. Coca-Cola rose 1.9% as sales grew along with the reopening of many venues and businesses over the summer.

Some companies' latest results fell short of investors' expectations.

General Motors fell 5.4% after reporting mixed results as the broader auto industry continues to face production problems because of a chip shortage. And Texas Instruments slid 5% after the chipmaker's third-quarter revenue fell short of Wall Street forecasts.

Fashion rental pioneer Rent the Runway fell 8.1% in its stock market debut after an early rally faded. The New York-based company's offering priced at $21 and closed at $19.29 a share.

U.S. crude oil prices fell 2.4% and pushed energy stocks lower. Exxon Mobil dropped 2.6%.

The steady flow of corporate report cards will continue today with industrial bellwether Caterpillar and technology giant Apple. Amazon and Starbucks will also report today.

Outside of earnings, investors are awaiting the latest update on U.S. economic growth when the Commerce Department releases its report on third-quarter gross domestic product today.

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