U.S. Stocks Close Little Changed After Recovering From Early Sell-Off
Stocks moved sharply lower in early trading on Wednesday but staged a significant recovery over the course of the session. The major averages climbed well off their lows of the session, with the Dow finishing the day just above the unchanged line.
After falling by more than 450 points early in the session, the Dow inched up 9.88 points or less than a tenth of a percent to 33,743.84.
Meanwhile, the S&P 500 edged down just 0.73 points or less than a tenth of a percent to 4,016.22, while the Nasdaq dipped 20.91 points or 0.2 percent to 11,313.36 after plunging as much as 2.3 percent.
The early sell-off on Wall Street largely reflected a negative reaction to earnings news from some big-name companies.
Software Microsoft (MSFT) showed a steep drop in early trading reporting its fiscal second quarter results after the close of trading on Tuesday.
Microsoft reported second quarter earnings that exceeded analyst estimates but provided disappointing revenue guidance for the current quarter.
Shares of Microsoft plunged by as much as 4.6 percent but showed a notable rebound over the course of the session and are closed down just 0.6 percent.
Aerospace giant Boeing (BA) also saw initial weakness after reporting an unexpected fourth quarter loss on weaker than expected revenues but finished the day slightly higher.
Meanwhile, shares of AT&T (T) spiked by 6.6 after the telecom giant reported better than expected fourth quarter earnings.
The recovery by stocks may have reflected traders being reluctant to make significant bets ahead of the release of some key economic data in the coming days.
Oil service stocks moved sharply higher over the course of the session, driving the Philadelphia Oil Service Index up by 2.2 percent to its best closing level in over three years.
The rally by oil service stocks came even as the price of crude oil finished the day nearly unchanged, with crude for March delivery inching up $0.02 to $80.15 a barrel.
Significant strength also emerged among gold stocks, which moved higher along with the price of the precious metal.
With gold for February delivery climbing $7.20 to $1,942.60 an ounce, the NYSE Arca Gold Bugs Index jumped by 1.9 percent to a seven-month closing high.
Banking, airline and steel stocks also showed strong moves to the upside, contributing to the recovery by the broader markets.
In overseas trading, stock markets across the Asia-Pacific ended mixed on Wednesday, with several markets still closed for the Lunar New Year. Japan’s Nikkei 225 Index rose by 0.4 percent, while Australia’s S&P/ASX 200 Index fell by 0.3 percent.
Meanwhile, the major European markets all moved modestly lower on the day. While the U.K.’s FTSE 100 Index dipped by 0.2 percent, the German DAX Index and the French CAC 40 Index both edged down by 0.1 percent.
In the bond market, treasuries showed a lack of direction over the course of the session before closing roughly flat. The yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 3.462 percent.
Following a few quiet days on the economic front, trading on Thursday may be impacted by reaction to reports on fourth quarter GDP, durable goods orders, weekly jobless claims and new home sales.
Earnings news is also likely to remain in focus, with IBM Corp. (IBM) and Tesla (TSLA) among the companies releasing their quarterly results after the close of today’s trading.
American Airlines (AAL), Comcast (CMCSA) and Mastercard (MA) are also among the companies due to report their quarterly results before the start of trading on Thursday.
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