Late Selling Hits Stocks

Updated from 3:17 p.m. EST

Stocks struggled for direction for much of the session Wednesday, but a fast-developing selloff in the final minutes of trading left the major averages saddled with losses at the close.

The Dow Jones Industrial Average fell 76.08 points, or 0.6%, to 13,231.01, and the S&P 500 lost 10.47 points, or 0.7%, at 1470.58. The Nasdaq Composite declined by 29.33 points, or 1.1%, to 2644.32.

"Without a follow-through to yesterday's advance, there wasn't much participation today and yesterday's rally petered out," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "There was a lack of a catalyst today, and the market unwound late in the day. It certainly doesn't make anyone feel good to see a decline today, but it shouldn't have been all that surprising."

Breadth was negative. On the New York Stock Exchange 3.80 billion shares changed hands, as decliners beat advancers by a 10-to-7 margin. Volume on the Nasdaq reached 2.36 billion shares, with losers topping winners nearly 3 to 2.

"This was extreme volatility, as people were positive one minute and negative the next," said Paul Mendelsohn, chief investment strategist with Windham Financial. "Given the way we closed, we should see weakness carry over from the close into tomorrow. Everyone showed their hand at the end of the day today, and that's why the last half hour was so critical."

He said traders were bothered all day by the bond market, "as yields should've gone up a lot considering how good the economic data was. The bond market is still negative in regards to what's coming."

At 4 p.m. EST, the 10-year Treasury note was up 1/32 in price, yielding 4.26%. The 30-year bond was up 7/32, yielding 4.60%.