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Stocks move broadly lower on Wall Street

Published: Wednesday, Nov. 13, 2013 10:28 a.m. CDT
Caption
(Richard Drew)
Trader Daniel Trimble, left, and Joseph Lucchese, right, work on the floor of the New York Stock Exchange Wednesday, Nov. 13, 2013. Stocks are getting off to a weak start on Wall Street, following overseas markets lower. (AP Photo/Richard Drew)

NEW YORK (AP) — Stocks were mostly lower on Wednesday as investors weighed signs of an improving economy against the prospect of the Federal Reserve cutting back on its economic stimulus.

Chegg, an online textbook rental company, flopped in its stock market debut, and clothing maker Perry Ellis plunged after cutting its revenue forecast because of weak sales. Macy's rose after beating analysts' earnings estimates.

The Federal Reserve is buying $85 billion of bonds a month to keep interest rates low and support the economy, helping drive a rally in stocks this year that has pushed indexes to record highs. Surprisingly strong reports on economic growth and hiring last week have led investors to speculate that the Fed may pare back its stimulus sooner than expected.

Investors will closely follow Thursday's confirmation hearing for Janet Yellen, who has been nominated to succeed Fed Chairman Ben Bernanke for clues about when the Fed may begin to reduce its economic stimulus.

The Standard & Poor's 500 index dropped a point, or 0.1 percent, to 1,766 as of 11:08 a.m. Eastern time. The Dow Jones industrial average fell 57 points, or 0.4 percent, to 15,693. The Nasdaq composite edged up two points, or 0.1 percent, to 3,922.

Six of the 10 industry groups in the S&P 500 fell. Telecommunications stocks fell the most, 0.7 percent.

The stocks of consumer companies got a lift from Macy's, which jumped $4.35, or 9.3 percent, to $49.95.

In government bond trading, the yield on the 10-year Treasury note fell to 2.74 percent from 2.77 percent Tuesday.

About 90 percent of companies in the S&P 500 have now reported their third-quarter results, and earnings are projected to rise by 5.6 percent in the July-to-September period. That's better than the 4.9 percent growth recorded in the second quarter and better than the 2.4 percent growth in same period a year ago.

The strong trend in company earnings should help the stock market rebound from any sell-off induced by concerns that the Fed is set to cut its stimulus, said Dan Morris, Global Investment Strategist at TIAA-CREF, an asset management company.

"What really matters are earnings for corporations," Morris said. "If people focus on that, it's all pretty good."

In commodities trading, the price of oil rebounded after a slump on Tuesday. Oil rose $1.46 , or 1.5 percent, to $94.47 a barrel. Gold gained $4, or 0.3 percent, to $1,275.10 an ounce.

Among other stocks making big moves:

—Chegg dropped $1.82, or 15 percent, to $10.63 on its first day of trading. Perry Ellis plunged $4.36, or 22 percent, to $15.22.

— Potbelly Corp. rose $4.52, or 16.6 percent, to $31.55, after its third-quarter adjusted earnings came in ahead of market expectations. It was the restaurant operator's first quarter as a publicly traded company.

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