It was the fifth straight day of losses for both the Dow and S&P. That's the worst stretch for both since a six-day losing streak in May. With the US economy sluggish, there was little for investors to hold on to as the Dow closed down 48 points at 12,604.
In this Tuesday, July 10, 2012, file photo, traders prepare for the start of early trading at the New York Stock Exchange. Tuesday's losses were compounded by yet another down day today, the fifth straight day of losses for The Street.
Bebeto Matthews/AP
EnlargeThe stock market mostly recovered from an afternoon slump to end with slight losses.
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In minutes from their latest meeting released Wednesday afternoon, Federal Reserve officials said they saw a variety of threats to the U.S. economy, including a slowdown in China and a looming budget crunch in Washington. The Fed also didn't signal that new steps to stimulate the economy were on the way.
Stock investors took the news badly at first, but by the end of the day were taking it in stride. The Dow Jones industrial average dropped as many as 118 points shortly after the 2 p.m. release of the Fed's minutes. Thanks to a recovery in the last hour it was down just 48 points at the closing bell, not much different from where it was earlier.
Fed officials said the economy could struggle if Congress fails to avert tax hikes and across-the-board spending cuts scheduled for the end of the year. They also worried that Europe's debt crisis and China's slower growth would weigh on the US.
But it was what the Fed didn't say that really tripped the stock market up, said Steven Ricchiuto, chief economist at Mizuho Securities USA. He said many traders had hoped to see evidence that the Fed was prepared to pull the trigger on a new bond-buying effort to prod the economy forward.
"They didn't get what they wanted to see," Ricchiuto said.
The Dow closed at 12,604.53, down 48.59 points. The Standard & Poor's 500 index slipped 0.02 of a point to 1,341.45. The technology-focused Nasdaq composite index lost 14.35 points to 2,887.98.
It was the fifth straight day of losses for both the Dow and S&P. That's the worst stretch for both since a six-day losing streak that ran through May 18. With Europe still working out the details of a bailout for Spanish banks and the U.S. economy still sluggish, there's little for investors to buy stocks.
"The bottom line is that there aren't a lot of investors willing to put money into this market," said Jeff Kleintop, chief market strategist at LPL Financial. "There's not much to get excited about."
The current batch of U.S. corporate earnings, which started to come in this week, isn't expected to help the stock market. Financial analysts forecast that companies in the S&P 500 will report a 2 percent earnings drop in the April-through-June period compared with the year before, according to the research firm S&P Capital IQ. That would be the first fall in profits since the summer quarter of 2009.
Chevron and other energy stocks rose, following oil prices higher. The price of crude oil jumped $1.90, to $85.81 a barrel, after the government said U.S. crude supplies fell for a second week in a row, a sign that demand for energy may be increasing.
Energy stocks led the 10 industry groups within the S&P 500 index, rising 1.4 percent. Chevron gained 97 cents to $104.85 and Exxon Mobil gained $1.27 to $84.38.
In Europe, Spain's borrowing costs fell after the country imposed new sales tax hikes and spending cuts in a bid to slash nearly $80 billion from its budget over the next two and a half years. High borrowing rates and 25 percent unemployment are squeezing Spain's economy.
Europe's debt crisis has led banks and investment funds from around the world to shift their money into Treasurys. High demand for Treasurys has kept U.S. government borrowing rates low.
The Treasury auctioned 10-year notes at a record low interest rate Wednesday afternoon, 1.46 percent.
Among other stocks making bigger moves than the overall market:
? HHGregg plunged 36 percent. The appliance and electronics retailer said after the market closed Tuesday that weak sales will cause its quarterly loss to widen. The company also cut its full-year earnings outlook. Analysts at SunTrust and Stifel Nicolaus downgraded the company's shares. The company's stock lost $4.20 to $7.34.
? AMC Networks jumped 2 percent. A stock analyst at Susquehanna Financial Group said AMC, whose shows include "Mad Men," and "The Walking Dead," could reach a settlement with Dish Network in their dispute over fees by mid-October. Dish replaced AMC's channels on July 1, arguing that they were too expensive. AMC's stock gained 86 cents to $40.73. Dish fell 3 percent, or 95 cents, to $26.80.
? Mead Johnson Nutrition surged 4 percent after a Chinese agency apologized for what it said were false accusations that the company's baby formula contained a possibly dangerous ingredient. The accusations helped knock the company's stock down 3 percent on Tuesday. Mead Johnson jumped $2.99 to $78.28.
Source: http://rss.csmonitor.com/~r/feeds/csm/~3/Qi811NusYs4/Stocks-close-lower-for-fifth-day-straight
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