Quantcast
Get breaking news alerts via email

Click here to manage your alerts
In this Tuesday, Oct. 23, 2012, photo, traders watch screens in a booth on the floor of the New York Stock Exchange. Stock futures are rising Tuesday, Oct. 24, 2012, ahead of the latest housing data and a report from China that could signal a recovery for the manufacturing sector of the world’s second largest economy. (AP Photo/Richard Drew)
Stocks stabilize on Wall Street after a sell-off
First Published Oct 24 2012 07:12 am • Last Updated Oct 31 2012 10:28 am

New York • The steep losses stopped Wednesday as the stock market turned calm, a day after one of its biggest sell-offs of the year. Indexes ended with slight losses after the Federal Reserve said the U.S. economy still needs support.

The Dow Jones industrial average closed down 25.19 points at 13,077.34, a day after one of its worst drops this year.

Join the Discussion
Post a Comment

The Standard & Poor’s 500 index fell 4.36 points to close at 1,408.75 while the Nasdaq composite index fell 8.76 points to 2,991.70.

"Today we’re assessing the damage," said Mark Luschini, chief investment strategist at Janney Montgomery Scott. "Everybody just got clobbered yesterday."

Lower corporate revenue and expectations for the rest of the year drove the Dow down 243 points Tuesday, its third-biggest drop this year. DuPont, 3M, UPS and Xerox all reported lower sales than a year ago.

"It seemed out of the blue, but what we were seeing was stock prices adjusting to corporate profitability," Luschini said.

The market flitted between small gains and losses for much of the day. Indexes started to fade after 2 p.m., after the Fed repeated its assessment that the U.S. economic recovery remains modest at best.

At the end of its latest two-day meeting, the Fed said the economy is still expanding at just a "moderate pace" and that it needs time to see whether a new bond-buying effort launched in September will spur economic growth and new hiring.

Third-quarter earnings reports have mainly disappointed investors. The Dow has risen just one day in the last five, a gain of two points on Monday. It lost 205 on Friday following poor results from Microsoft, General Electric and McDonald’s.

The latest batch of earnings reports wasn’t as dire, and there was the occasional piece of encouraging news.


story continues below
story continues below

Facebook had its best day since its stock market debut in May. The company said late Tuesday that 14 percent of its advertising revenue came from mobile devices, allaying some investor concerns.

The social network’s stock soared $3.73 to $23.23, a jump of 19 percent. Facebook has swung widely since its IPO at $38, and has traded as low as $17.55.

AT&T, which is part of the Dow average, said it added the fewest wireless customers since 2003, far behind Verizon Wireless. AT&T’s results still managed to beat the estimates of financial analysts. AT&T slid 29 cents to $34.71.

A measure of manufacturing in China, the world’s second-largest economy after the United States, improved this month to a three-month high. China’s white-hot economic growth has been slowing.

Homebuilder stocks gained after the Commerce Department reported that sales of new homes jumped last month to the highest level in more than two years. Toll Brothers rose 70 cents to $35.25 and D.R. Horton rose 32 cents to $21.41.

A drop in profits for Norfolk Southern hit other railroad stocks. Norfolk Southern reported a 27 percent slump in quarterly earnings late Tuesday, as falling coal prices led to lower revenue. Many utilities have favored using cheap natural gas instead of burning coal this year, pushing down coal prices and weighing on railroad operators.

Norfolk Southern fell $4.92 to $61.09. Union Pacific lost $2.35 to $120.87.

Prices for U.S. government bonds inched lower, sending yields up. The yield on the benchmark 10-year Treasury note edged up to 1.79 percent from 1.76 percent late Tuesday.

Among other stocks in the news:

— Netflix dropped $8.10, or 12 percent, to $60.12. Late Tuesday, it slashed its prediction for how many U.S. video-streaming subscribers it would add this year to 4.7 million to 5 million. It had predicted it would add as many as 7 million.

— Dow Chemical rose $1.33 to $29.88. The company announced a wide-ranging restructuring plan late Tuesday that includes cutting 2,400 jobs and closing 20 manufacturing facilities. The company cited slowing economic growth in Europe and elsewhere.

Next Page >


Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.