Stocks slip following homebuilding slowdown
NEW YORK (AP) — Caterpillar helped drag the stock market lower Wednesday after the industrial giant reported weaker worldwide sales. A mixed report on housing also weighed on the market.
News that Apple's major supplier, Foxconn, stopped hiring at its largest plant in China helped push down Apple's stock. Foxconn reportedly said the hiring freeze was not caused by slumping orders for iPhones. Apple fell $7.29 to $452.70.
Trading turned choppy after the Federal Reserve released details of its meeting last month. According to the minutes, several policymakers worried that the Fed's bond-buying effort could eventually unsettle financial markets or cause the bank to take losses. Most of the Fed officials thought the economy faced fewer risks than in December.
The Dow fell 27 points to 14,008 as of 2:30 p.m. EST. Caterpillar slid $1.78 to $93.83.
The Standard & Poor's 500 index dropped eight points to 1,523. The Nasdaq composite fell 20 points to 3,193.
The stock market surged at the start of the year, then drifted slightly higher in recent weeks with few major events to drive trading one way or another. That could change as soon as Congress returns from vacation next Monday. Deep federal spending cuts are scheduled to start March 1 unless Congress and the White House find a way to avoid them.
Both the Dow and the S&P 500 have gained nearly 7 percent for the year. The Nasdaq is up 6 percent.
Phil Orlando, chief market strategist at Federated Investors, believes the stock market has climbed too quickly this year. He's looking for it to get knocked down by 3 percent or more in the coming weeks. Another budget battle in Washington could be the trigger.
"There are a lot of us who say, 'We're a little bit ahead of ourselves here,'" Orlando said. "I still expect an all-time high for the S&P 500 this year, but it's going to get there in fits and starts."
Even though housing construction slowed down in January, the Department of Commerce reported Wednesday that new housing starts remained strong. Builders started construction at an annual rate of 890,000 last month, down 8.5 percent from December. Applications for building permits increased.
Boeing rose $1 to $75.65. An investigation into the overheating of a battery that caused a Boeing 787 to make an emergency landing in Japan last month found that it was incorrectly wired. Separately, Boeing's engineers approved the company's contract offer late Tuesday, defusing a showdown that could have resulted in a strike.
The Dow closed at its highest level of the year Tuesday, bringing it within one percent of 14,164, the record high reached more than five years ago.
In the U.S. government bond market, the yield on the 10-year Treasury note was unchanged from late Tuesday at 2.03 percent. The yield, which is used as a benchmark rate for mortgages and other loans, has climbed steadily higher since the start of the year, when it traded around 1.70 percent.
Among companies making moves:
— GPS device maker Garmin slumped 9 percent, the biggest drop in the S&P 500 index, after the company's results missed analysts' forecasts. Demand has waned for handheld navigation devices as more customers use maps on their smartphones. Garmin lost $3.63 to $35.61.
— Food giant ConAgra gained 1 percent after it raised its profit forecast for the year. The company, whose brands include Chef Boyardee, said its acquisition of Ralcorp will add a nickel per share to adjusted earnings this year. ConAgra's stock rose 33 cents to $33.78.