Wall Street dips day after rally, profit warnings
NEW YORK -- Wall Street fell in early trading Wednesday, giving back some of the prior session's advance that came on renewed optimism about lower interest rates.
Investors appeared largely unfazed by profit warnings from International Paper Co. and Chevron Corp. A pullback was to be expected after the rally Tuesday that sent the Dow Jones industrial average and the Standard & Poor's 500 index to new closing highs.
With little fresh news to weigh, Wall Street waited for economic readings later in the week on employment and inflation.
Stocks surged Tuesday after some investors read minutes from the Federal Reserve's last meeting as implying further rate cuts might be in the offing. The Fed's Sept. 18 decision to lower short-term interest rates by a larger-than-expected half percentage point stoked a recovery in stocks that had been hurt by concerns about tight access to credit and an economic slowdown.
In the first hour of trading, the Dow fell 38.94, or 0.27 percent, to 14,125.59 after rising 120 points on Tuesday.
Broader stock indexes were narrowly lower. The S&P 500 dipped 4.19, or 0.27 percent, to 1,560.96, and the Nasdaq composite fell 0.19, or 0.01 percent, to 2,803.72.
Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.68 percent from 4.65 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude rose 2 cents to $80.24 per barrel on the New York Mercantile Exchange. The Energy Department's forecast for winter demand helped support prices, but investors were still concerned that a warm winter could take futures lower.
International Paper lowered its projection for how much it expects to take in from sales of land in the third quarter, news that sent shares falling 84 cents, or 2.3 percent, to $36.22. Chevron fell $1.75 to $91.05 after the company warned that its third-quarter profit will come in well below the $5.4 billion it earned in the second quarter.
However, Wall Street also received upbeat news from companies including Costco Wholesale Corp., which reported better-than-expected results. Shares of the retailer rose $5.56, or 8.8 percent, to $68.86.
The Russell 2000 index of smaller companies fell 0.69, or 0.08 percent, at 845.03.
Overseas, Japan's Nikkei stock average rose 0.10 percent. Britain's FTSE 100 fell 0.12 percent, Germany's DAX index was unchanged, and France's CAC-40 fell 0.42 percent.