Stocks mostly lower on FedEx warning, bank downgrade
NEW YORK -- Stocks ended mostly lower Wednesday, though the slide wasn't as severe as in the first two days of the week.
FedEx issued a weak profit forecast and downbeat comments about the economy. Financial stocks saw some of the biggest losses after S&P cut its ratings and revised outlooks on big banks.
At the close of trading, the Dow Jones industrial average was down 7.49 at 8,497.18. The Standard & Poor's 500 index fell 1.26 at 910.71, and the Nasdaq rose 11.88 to 1,808.06.
About three stocks fell for every two that rose on the New York Stock Exchange, where volume came to 1.3 billion shares.
FedEx issued a weak profit forecast and downbeat comments about the economy. Analysts look to shipping companies' business as a gauge of the economy's strength.
Financial stocks saw some of the biggest losses after Standard & Poor's cut ratings and revised outlooks on big banks. S&P cited concerns that the financial industry will remain volatile and that banks are expected to face tighter regulatory oversight.
In a bright spot, consumer prices rose less than forecast in May. Investors have been worrying that increasing prices would threaten a recovery in the economy by curbing demand.
Trading is likely to remain choppy ahead of Friday's quarterly "quadruple witching" day, which marks the simultaneous expiration of a number of different options contracts. Dan Deming, a trader with Strutland Equities in Chicago, said stocks are more likely to gain ground during such times.
The fall in stocks this week comes after stocks notched only modest gains last week. The selling has inserted a break into a three-month rally that had carried the S&P 500 index up 40% from 12-year lows. Many traders say expectations for an economic recovery had been too rosy.
Richard Hughes, co-president of Portfolio Management Consultants, said the market had gotten ahead of itself during the spring rally and that the economy remains weak. "People are taking a pause and it makes sense," he said.
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