Skip to main content

Updated from 4:11 p.m. EDT

Wall Street closed slightly lower Wednesday as earnings season got off to a rocky start with disappointing results from aluminum giant

Alcoa

(AA) - Get Alcoa Corp. Report

and big biotech

Genentech

(DNA)

.

The

Dow Jones Industrial Average

lost 15.04 points, or 0.13%, to 11,852.13, having been down as many as 50 points earlier. The

S&P 500

was off 3.47 points, or 0.26%, at 1349.95.

The tech-laden

Nasdaq Composite

shed 7.16 points, or 0.31%, to 2308.27. A rise of 5.4% in

TheStreet Recommends

Ericsson

(ERIC) - Get Telefonaktiebolaget LM Ericsson Sponsored ADR Class B Report

provided limited support for the index.

Stocks took an initial hit after a small airplane crashed into a building on 72nd Street on the Upper East Side of New York City, but rebounded somewhat after officials said there was no evidence of terrorism.

While volume improved, breadth worsened from the previous day. About 2.60 billion shares changed hands on the

New York Stock Exchange

, with decliners outpacing advancers by a 10-to-7 margin. Volume on the Nasdaq was roughly 2.02 billion shares, and losers beat winners 3 to 2.

The session was sluggish from the beginning. Following the close of trading Tuesday, Alcoa said its quarterly profit surged more than 80% year over year, but revenue was a bit shy of analysts' projections. The results from Alcoa, a Dow component that's generally thought of as marking the start of earnings, sent its shares lower by $1.44, or 5.1%, to close at $26.85.

As for Genentech, though it beat analysts' targets on the top and bottom lines and guidance was upbeat, sales of some individual drugs came up short. The stock fell $1.45, or 1.7%, to $84.15.

"All sectors have been outperforming heading into earnings, so the bar hasn't been raised in terms of earnings expectations," said James Park, managing director with Rodman & Renshaw. "The price appreciation was high going into the news, so instead we're looking at people selling the news."

Legg Mason

(LM) - Get Legg Mason, Inc. Report

tumbled 17.2% a day after warning of a steep earnings shortfall. The company expects to earn 96 cents to $1.02 a share in its fiscal second quarter, far below estimates. Revenue is likely to fall 1% from the first quarter. Shares dropped $18.16 to close at $87.15.

To view Farnoosh Torabi's video take on today's market, click here

On the economic front, the minutes of the

Federal Reserve's

Sept. 20 gathering were posted, and they suggested that participants felt more rate hikes could be needed in the future.

At the meeting, policymakers left the fed funds target rate, the rate banks use to charge each other interest for overnight loans, at 5.25%. That was the second consecutive time that the Fed had met without increasing rates.

The minutes indicated that members of the

Federal Open Market Committee

believed that in terms of the inflation outlook, "the most likely outcome was a reduction in inflation pressures, but the anticipated decline was only gradual and the uncertainties around that forecast were skewed toward higher rather than lower inflation rates."

The text also showed that several bankers were concerned about credibility, noting that "inflation expectations could rise and the Federal Reserve's willingness to carry through on its intention to seek price stability could be called into question if cost and price pressures mounted or even if there was no moderation in core inflation."

Again, there was heavy focus on developments in the housing market, with cautious tones about slowing home sales and the cancellation of contracts. However, "growth was likely to strengthen next year as the housing correction abated, with activity also encouraged by the recent decline in energy prices and still-supportive financial conditions," the minutes read.

Oil prices fell after OPEC's president said again that the petroleum-exporting group will cut production by 1 million barrels a day. After the announcement from Nigerian oil minister and OPEC president Edmund Daukoru, crude dropped 93 cents to $57.59 a barrel, the lowest close since June 2005. Natural gas also traded down.

Metals were uniformly stronger, as gold advanced 30 cents to close at $576.50 an ounce and silver tacked on 11 cents to $11.33 an ounce. Copper also ticked higher.

Treasuries extended the prior-day selloff following the Fed's minutes. The 10-year note recently fell 8/32 in price to yield 4.79%. Meanwhile, equity markets were generally weaker overseas.

Executives at two big tech names have found themselves out of work as a result of the options-backdating flap that has entangled dozens of U.S. companies.

McAfee

(MFE)

, a maker of security software, fired President Kevin Weiss and said Chairman and CEO George Samenuk will retire in the wake of an investigation into its past option grants.

Separately,

CNET

(CNET) - Get ChinaNet Online Holdings, Inc. Report

said co-founder Shelby Bonnie resigned as chairman and CEO after an internal probe of historical option awards at his company. Along with Bonnie, who will remain a director, CNET's general counsel and head of human resources have also stepped down.

McAfee was up 85 cents, or 3.3%, to $26.64. CNET lost 76 cents, or 7.7%, to finish at $9.14.

On Thursday, earnings reports are expected from

Harley-Davidson

(HOG) - Get Harley-Davidson, Inc. (HOG) Report

,

Costco

(COST) - Get Costco Wholesale Corporation Report

,

PepsiCo

(PEP) - Get PepsiCo, Inc. Report

and

Genzyme

(GENZ)

.