Stocks finished mixed on Wall Street Wednesday, with blue-chip stocks edging lower as investors found little reason to recommit to the market before the beginning of corporate earnings season and ahead of two key economic reports due out this week.
Cash flowing into mutual funds helped prop up some sectors of the market, including technology shares, but on the whole, investors were holding back ahead of reports Thursday on December sales for major retailers and another report Friday on December employment.
The Dow Jones industrial average closed the day down 9.63 points, or 0.1 percent, at 10,529.03. The broader stock indicators rose.
The Standard & Poor’s 500-stock index edged up 2.66 points, or 0.2 percent, to 1,126.33, while the Nasdaq composite index rose 20.31 points, or 1 percent, to 2,077.68
“This is a fairly mild consolidation,” said Russ Koesterich, U.S. equity strategist at State Street Corp. in Boston. “We’ve had a good run since December, and the market needs some time to digest that ahead of the earnings season, which really gets under way in the next week or two.”
Part of the weakness in blue chip shares Wednesday was attributed to profit-taking following a consistent runup in blue chip shares since late November, when the Dow Jones industrial average was hovering just above 9,600.
Technology shares went against the downward trend, gaining some ground on a bullish analyst report on Intel Corp. that lent support to semiconductor shares. Intel rose $1.00 to $33.90.
Some skittishness about the upcoming corporate earnings season was evident in the market Wednesday as investors pushed the shares of Dow component Alcoa Inc. down 29 cents at $38.20 ahead of the company’s earnings report Thursday.
Brian Pears, head equity trader at Victory Capital Management in Cleveland, said that what little support the market was getting came not from any solid news from earnings or economics but from the “January effect,” a seasonal flow of money into stocks and mutual funds.
“It’s more a question of liquidity than fundamentals,” Pears said. “We’re seeing some decent inflows to start the year. ... Mutual fund managers aren’t being paid to manage cash right now, so we have to invest it.”
No major economic indicators came out Wednesday, leaving the most recent reading on the economy a relatively poor showing for U.S. factory orders that came out Tuesday. Orders fell by 1.4 percent in November, the biggest decline in seven months, and a separate report showed slower-than-expected growth in the services sector.
Some traders were looking ahead with trepidation to the December employment report, the next major reading of the economy. An indication of poor job growth could put discourage investors that this key sector of the economy is still struggling.
Economists will get another important indicator of consumer spending trends — another key element of the economy — on Thursday when major retailers report sales for December.
Darden Restaurants Inc. plunged $1.88 to $19.00 after the Orlando, Fla.-based restaurant company reported sharply lower December sales at its Red Lobster unit. The company also said its relatively new president had resigned.
Biotechnology company Monsanto Co. was up $1.09 at $29.20 after reporting first-quarter operating earnings of 4 cents per share, beating Wall Street estimates of a penny per share.
Duke Energy Corp. jumped $1.17 to $21.20 after announcing it would continue paying a quarterly dividend. Wall Street analysts had said Tuesday they expected the energy company to slash its dividend as it cuts back on its debt load.
Declining issues barely outnumbered advancing ones on the New York Stock Exchange. Volume was moderate.
The Russell 2000 index of smaller companies was up 4.73 points at 574.62.
Overseas, Japan’s Nikkei stock average fell 0.5 percent. Britain’s FTSE 100 closed down 0.7 percent, Germany’s DAX index was down 0.8 percent, and France’s CAC-40 was down 0.9 percent.