Stocks close lower, but bounce off support
In a volatile trading session, the benchmark Standard & Poor's 500 Index hit a session low of 1,737.92, marking its lowest level since Oct. 18, before rebounding to briefly climb into positive territory with a session high of 1,755.79.
Data is being closely watched after a weak reading in the factory sector on Monday sent Wall Street into a tailspin and triggered a global equity selloff. Wednesday’s data left investors with little clarity about the economic impact from the harsh weather this winter.
Growth picked up in the U.S. services sector in January, with steady strength in private-sector hiring, suggesting the winter weather that socked the country over the last several weeks had a limited effect on the economy.
“Clearly, we are getting that support off that 1,740 area, which has held so far this week, at least,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research in Cincinnati.
“Today’s (data) almost just added to the confusion, or added to the indecision, as to what exactly should we believe — is it weather-related or is it not — and that is the big question that isn’t answered yet and won’t be answered for a little bit of time.”
Investors were also cautious with the U.S. unemployment report looming on Friday. Last month’s surprisingly low number was discounted by many as an outlier negatively affected by the severe weather.
But as other data has also been uninspiring, there is concern that another weak report could be an indication of a greater macroeconomic problem.
The Dow Jones industrial average slipped 5.01 points or 0.03 percent, to end at 15,440.23. The S&P 500 dipped 3.56 points or 0.20 percent, to finish at 1,751.64. The Nasdaq Composite fell 19.968 points or 0.50 percent, to close at 4,011.552.
After the closing bell, Walt Disney Co. reported a higher quarterly profit and its stock climbed 1.5 percent to $72.81 in extended-hours trading.
The limp data earlier in the week added to concerns about growth in China and the outlook for some emerging market economies. A recent rout in emerging currencies spurred some central banks to act, pressuring bond and stock holdings and luring investors into assets perceived as relatively safe, like the yen and U.S. and German government debt.
In the latest comments from the Federal Reserve, Philadelphia Federal Reserve Bank President Charles Plosser, a hawkish policymaker, said the central bank should wind down its bond purchases faster than planned and end the stimulus program before mid-year.
Of the 298 companies in the S&P 500 that have reported earnings, 69.5 percent have topped Wall Street’s expectations, according to Thomson Reuters data through Wednesday morning. That performance exceeds the 63 percent beat rate since 1994 and the 67 percent rate for the past four quarters.
Gilead Sciences Inc fell 4.7 percent to close at $78.15. The stock was the heaviest weight on the S&P 500 a day after the company reported quarterly results.