Calmer stocks rally, wobble, then end lower
NEW YORK — It was another shaky day on Wall Street as indexes rallied in the morning, bobbed up and down for much of the day, then sank in the last few minutes of trading.
Energy companies dropped along with oil prices and technology companies also declined.
Stocks were coming off a big gain on Tuesday. At times investors looked ready to jump back in after steep losses Friday and Monday, yet every gain the market made was met with more selling. About 20 minutes before the close of trading the Dow Jones industrial average was up more than 260 points, but it finished with a small loss.
After two steep plunges, including its worst loss in six and a half years Monday, the S&P 500 is down 6.7 percent from its most recent record high set on Jan. 26.
While markets were noticeably calmer on Wednesday, there are signs that investors are still far more nervous than they were just a few days ago. The VIX, which is called Wall Street’s “fear gauge” because it measures how much volatility investors expect in the future, is currently at 27, more than double where it was two weeks ago. It spiked above 50 early Tuesday.
“The markets had blinders on,” said Invesco Chief Global Markets Strategist Kristina Hooper. “I thought it was almost alarming that markets weren’t considering that, for example, we have a different (Federal Reserve) in 2018 that could be more hawkish.”
Stocks tumbled Friday after the Labor Department said that workers’ wages rose in January at their fastest pace in eight years. That’s good for the economy, but Hooper noted that higher pay to workers can reduce corporate profits, and those profits are the stock market’s fuel. And while higher pay affects company profits quickly, it can take a long time for workers to start spending more money after they get a raise.
The Standard & Poor’s 500 index lost 13.48 points, or 0.5 percent, to 2,681.66. The Dow slid 19.42 points, or 0.1 percent, to 24,893.35. The Nasdaq composite fell 63.90 points, or 0.9 percent, to 7,051.98. Smaller companies fared better than the rest of the market, and more stocks rose than fell on the New York Stock Exchange.
The gap between the Dow’s highest and lowest levels on Wednesday was about 500 points, or 2 percent. That big, but it’s dwarfed by the lurching moves the market made the last few days.
While investors may still be uncertain about where stocks are going, they’re not rushing for cover in ultra-safe investments like bonds. Bond prices fell, sending yields higher. The yield on the 10-year Treasury note, a benchmark for mortgages and other kinds of loans, rose to 2.84 percent from 2.81 percent.