US stocks slide
Wall Street retreated today as mixed earnings news and rising oil prices prompted investors to take profits from a sharp rally in the previous trading session. A disappointing forecast from Intel also dragged down the Nasdaq composite index.
Better-than-expected results from Apple Computer and Motorola countered a hefty loss at Ford. But investors worried about a slowdown in tech spending were rattled by a steep earnings drop at Intel, which gave no indications that conditions would improve in the second half of the year.
Coupled with anxiety about political unrest in the Middle East, the blend of earnings data dampened the market’s cheer over signals that the Federal Reserve may be near an end to its string of interest rate hikes.
On Wednesday, the Dow Jones industrials surged 212 points after Fed Chairman Ben Bernanke said the US economy was moderating and inflation was contained.
Although Bernanke reiterated his comments today, the pullback reflected fear that high oil prices could fuel inflation and cause the Fed to keep boosting rates. Minutes from the Fed’s June meeting added pressure on stocks in afternoon trading, with the central bank saying there was still significant uncertainty about future rate hikes.
“From a fundamental perspective, with mixed earnings and positive news from the Fed, this would qualify as somewhat of an aimless market,” said Chris Johnson, manager of quantitative analysis for Schaeffer’s Investment Research. ”Technicals will give a good bit of direction to a market that’s otherwise directionless.”
The Dow declined 83.32, or 0.76%, to 10,928.10.
Broader stock indicators also fell. The Standard & Poor’s 500 index dropped 10.68, or 0.85%, to 1,249.13, and the technology-laden Nasdaq lost 41.29, or 1.98%, to close at 2,039.42.
