Investors weighed hopes for a Fed rate cut against a new closing record for crude and a disappointing forecast from Texas Instruments
Major U.S. stock indexes ended narrowly mixed Wednesday as the market's hopes for an interest rate cut at next week's FOMC meeting were unable to trump a fresh record for crude oil and a tepid third-quarter profit forecast from Texas Instruments (TXN).
On Wednesday, the Dow Jones industrial average fell 16.74 points, or 0.13%, to 13,291.65. The broader S&P 500 index rose 0.07 points, or 0.01%, to 1,471.56. The tech-heavy Nasdaq composite index fell 5.4 points, or 0.21%, to 2,592.07, though losses were capped by strength in biotech giant Amgen (AMGN).
The broader market was weak on Wednesday, with 19 stocks falling in price for each 15 that rose on the NYSE. Nasdaq breadth was 18-12 negative.
Wall Street is waiting for the Federal Reserve to act at its Sept. 18 meeting, mostly debating whether the Fed will cut interest rates, through the federal funds rate, by a quarter- or half-point.
The weekly report from the U.S. MBA mortgage market index gave investors a view into that troubled sector. The index bounced back 5.5% in the last week, though the data was adjusted for Labor Day closures. The purchase index was up 5.2% and the refinancing index rose 6%.
Crude oil futures soared to record highs in New York trading Wednesday after the Energy Department reported a greater-than-expected decline in crude oil inventories. October crude closed at $79.91 per barrel, up $1.68 from Tuesday's close, after trading as high as $80.18.
On Wednesday, gold fell for the first time in five sessions, as profit takers cashed in on gains that had driven the yellow metal to a 13-month high in the previous session. December gold futures eased 40 cents to $720.70 an ounce, while spot gold slid 77 cents to $711.73. The pullback occurred even though the dollar extended
its recent weakness, fueled by ongoing speculation the Federal Reserve will cut interest rates next week.
Among stocks in the news on Wednesday, Texas Instruments narrowed its expectations for third quarter revenue and earnings. It sees revenue of $3.56 billion to $3.72 billion, and earnings of 49 to 53 cents per share. Shares fell 1.7% Wednesday.
Amgen gained after an FDA panel voted against certain restrictions on drugs produced by the company and Johnson & Johnson (JNJ) to treat anemia brought on by kidney failure. Amgen shares rose 3.3% Wednesday, while J&J shares gained 0.7%.
H&R Block (HRB) will eliminate an extra 575 jobs, on top of the 615 positions cut in May, as part of a cost-cutting program launched in response to fewer mortgage originations and the state of credit markets. Block shares fell 0.9% Wednesday.
Jos. A Bank Clothiers (JOSB) reported earnings of 44 cents in the second quarter, vs. 38 cents a year ago on a 13% rise in revenue. The shares rose 5.8%.
Chiquita Brands International (CQB) says it expects a slight improvement in third quarter net sales, but profit margins are getting squeezes by higher costs. The shares fell 2.8%.
General Cable Corp. (BGC) shares surged 7.2% Wednesday after the company agreed to acquire Freeport-McMoran Copper & Gold Inc.'s (FCX) global wire and cable business for $735 million.
European equity indexes recovered to finish higher Wednesday. In London, the FTSE 100 index gained 0.41% to 6,306.2. Germany's DAX index added 0.2% to 7,472.99. In Paris, the CAC 40 index rose 0.53% to 5,508.01.
In Japan, the Nikkei index was off 0.5% to 15,797.6. In Hong Kong, the Hang Seng index was up 1.49% to 24,310.14. The Shanghai composite index rose 1.15% to 5,172.63.
Treasuries fell in price Wednesday as sentiment that a rate cut by the Fed at the Sept. 18 FOMC meeting had been priced into the market prompted some profit-taking after recent gains. The 10-year note fell 08/32 in price to 102-26/32 for a yield of 4.40%, while the 30-year bond slid 12/32 to 105-06/32 for a yield of 4.67%.