Updated from 4:15 p.m. EDTBlue-chip stocks ended lower Wednesday as selloffs in the financial and transportation sectors pulled the Dow Jones Industrial Average and the S&P 500 back from their record levels. The Dow lost 85.84 points, or 0.61%, at 14,078.69, and the S&P 500 was off 2.68 points, or 0.17%, to 1562.47. The Nasdaq Composite was stronger, rising 7.70 points, or 0.27%, to 2811.61, buoyed again by a 1.7% rise in Google ( GOOG). Boeing ( BA) pressured the Dow, falling 2.7% after saying it would delay the initial deliveries of the 787 Dreamliner plane by six months. Another weak spot was Alcoa ( AA), whose third-quarter earnings fell just short of estimates. The stock lost 2.5%. The energy sector was the best performer of the day, with the Philadelphia Oil Service Sector Index surging 3% and the Amex Oil Index adding 0.5%. Those moves came despite profit warnings from Chevron ( CVX) and Valero ( VLO). Valero's stock sank as low as $69.95 before reversing course and rising 2.9% to close at $74.25. Chevron also recovered from its worst levels but still went out down 0.8% to $92.08. On the flipside, financials and transportation stocks were hard hit. The Dow Jones Transportation Index fell 1.1%, and the KBW Bank Sector Index slid 1.1%. "The S&P 500 and the Dow made new highs yesterday, but transports and financials didn't," said Philip Roth, chief technical market analyst with Miller Tabak. "We consolidated a bit today, which is actually favorable in the context of yesterday. There is still a narrow uptrend with financials lagging, and that sector will continue to drag on the market."
On the New York Stock Exchange, 2.99 billion shares changed hands, and decliners topped advancers by a 6-to-5 margin. Volume on the Nasdaq reached 1.95 billion shares, with losers edging out winners nearly 8 to 7. The quarterly numbers from Alcoa, which came after the prior close, marked the unofficial start of earnings season. The pace of reports will pick up dramatically next week. Another company with profit news was International Paper ( IP), who disappointed investors with word that lower-than-expected land sales would hit its results. International Paper slid 2.4% to close at $36.18. Other notables with reports included retailer Costco Wholesale ( COST), Host Hotels & Resorts ( HST) and agricultural company Monsanto ( MON). Costco posted a fiscal fourth-quarter profit of $372.4 million, or 83 cents a share. Excluding a charge, the company reported earnings per share of 91 cents a share, topping estimates. However, quarterly revenue fell short of forecasts. Still, Costco soared $5.82, or 9.2%, to $69.13. Monsanto reported a widening fiscal fourth-quarter loss of $210 million, or 39 cents a share. Excluding items, Monsanto lost 18 cents a share, a penny more than analysts expected. The company also guided below the Wall Street consensus for fiscal 2008, and shares were off 74 cents, or 0.8%, to $88.78. On the other hand, Host Hotels beat the consensus for the top and bottom lines, and the stock rose 29 cents, or 1.3%, to $23.40.
Away from earnings, workers at Chrysler walked off their jobs after the United Auto Workers union failed to reach a labor agreement with the automaker before an 11 a.m. EDT deadline. Commodity prices were on the rise. Crude oil jumped $1.04 to close at $81.30 a barrel. Gold futures were up $2.90 to $746 an ounce, and silver gained 8 cents to $13.66 an ounce. The Energy Department will post its weekly inventory report on Thursday, a day later than usual because of the Columbus Day holiday. Treasury prices withstood early selling and rose late. The 10-year note was up 3/32 in price, cutting the yield to 4.64%. The 30-year bond was adding 2/32 to yield 4.86%. The dollar was slightly weaker against the world's major currencies. Overseas markets generally improved. In Asia, Hong Kong's Hang Seng rose 1.2%, and Japan's Nikkei 225 crept 0.1% higher. In Europe, London's FTSE 100 added 0.3%, while Germany's Xetra Dax was flat.