New York: The Dow and the Nasdaq lost ground on Wednesday as minutes from the Federal Reserve’s June meeting showed policymakers are open to the idea of more economic stimulus, but that conditions might need to worsen first.
Investors were hoping the Fed’s June minutes would suggest the central bank was getting closer to another round of stimulus. The lack of clues prompted selling in all three major indexes, though stocks pared losses just ahead of the close.
“A few Fed members noted additional policy action could be warranted if the economy were to lose momentum; however, it doesn’t seem like anything concrete is imminent,” said Michael Sheldon, chief market strategist of RDM Financial, in Westport, Connecticut.
“That, along with the FOMC’s citing that risks have increased and volatility is higher, are probably the culprits for the market’s afternoon swoon.”
The Nasdaq was the worst performer of the three major indexes. Network gear maker Adtran Inc warned about third-quarter revenue, driving its stock down 15.4% to $23.01 and hitting shares of its rivals. Juniper Networks fell 1.1% to $14.68, and Ciena lost 7.9% to $14.15.
The warning followed weaker forecasts earlier this week from chipmakers, including Advanced Micro Devices. Its stock slid 2% to $4.89 on Wednesday.
Some analysts expect earnings disappointments from major technology companies this earnings season. They say estimates for tech names are likely to go down.
The Dow Jones industrial average shed 48.59 points, or 0.38%, to end at 12,604.53. The Standard & Poor’s 500 Index dipped just 0.02 of a point to finish at 1,341.45. The Nasdaq Composite Index slipped 14.35 points, or 0.49%, to close at 2,887.98.
It was a fifth day of losses for the Dow.
Helping to support the S&P 500 were financials, which gained after four days of losses. The financial index was up 0.8%. Some banks, including JPMorgan Chase & Co, up 1% at $34.59, are due to report results on Friday.
Other earnings warnings included Hhgregg Inc, an appliance and consumer electronics retailer, which forecast a wider-than-expected loss for the first quarter and cut its full-year outlook. Its stock sank 36.4% to $7.34. Rival Best Buy Co Inc slumped 8.4% to $19.37.
Among the day’s economic data, the US trade deficit narrowed by 3.8% in May, helped by a rise in exports, including those bound for Europe and China. But economists warned it might not last.
After the close, shares of hotel chain Marriott International dipped 0.5% to $37.84 following the release of its results.
Volume was lighter than average. About 6.02 billion shares changed hands on the New York Stock Exchange, the Nasdaq and Amex, compared with the year-to-date daily average of 6.85 billion shares.
Advancers beat decliners on the NYSE by a ratio of about 16 to 14. On the Nasdaq, decliners slightly outnumbered advancers.
