NEW YORK ( TheStreet) -- Stocks finished Wednesday's session in the red after the Federal Reserve's beige book revealed some fissures in the nation's economic recovery. Stocks had already been under pressure after a government report showed an unexpected drop in June durable goods orders.

The Dow Jones Industrial Average shed 40 points, or 0.4%, to 10,498. The S&P 500 lost 8 points, or 0.7%, to 1106, and the Nasdaq shed 24 points, or 1%, at 2265.

The Fed released its July beige book in the afternoon. The collection of anecdotal reports from the Fed's 12 reporting districts, which will be used by the Federal Open Market Committee to help gauge economic conditions during its next policy-setting meeting on Aug. 10, offered a softer view of the economy.

In its June summary, the Federal Reserve highlighted economic improvement, though modest in most instances, across "all twelve Federal Reserve Districts." Though overall growth continued in this most recent July assessment, the Fed found that economic activity in its Cleveland and Kansas City districts leveled, while the Atlanta and Chicago districts reported a slowing pace. The report went on to say factory activity "slowed or leveled off" in several districts, though the labor conditions "improved modestly across the districts."

The results more or less matched the sensibility in the market, as a steady drumbeat of negative indicators of late have weighed on sentiment despite some upbeat corporate earnings and guidance announcements. Investors were particularly eager for some clarity regarding economic conditions since Fed Chairman Ben Bernanke described the economic outlook as "unusually uncertain" in his recent testimony on the economy and monetary policy on Capitol Hill.

"Really, there was nothing all that surprising in the beige book. It basically said what we already know from the other releases: that things are slowing and certain regions are slowing more than others," said Marc Pado, U.S. market strategist at Cantor Fitzgerald, who also believes the subsequent market sell-off was due to waning enthusiasm for Thursday's initial claims report and Friday's read on second-quarter GDP. "Overall, it's confirmation of what people felt in general. The economy slowed in May and June and continues to do so in July."

Overseas Wednesday, Hong Kong's Hang Seng rose 0.6%, and Japan's Nikkei gained 2.7%. The FTSE in London was lost 0.9%, and the DAX in Frankfurt shed 0.5%.

The Economy

Durable goods orders dropped 1% in June, upsetting expectations for 1% growth. The Department of Commerce also downwardly revised May's decline to 0.8%, from 0.6%, previously. Excluding transportation, orders fell 0.6%, as expected, after rising 1.2% in May.

The Energy Information Administration reported a surprise 7.3 million-barrel jump in inventories in the week ended July 23. The increase was larger than the 3.08 million-barrel build that the American Petroleum Institute reported late Tuesday and well ahead of the 2.3 million-barrel decline that analysts polled by Platts had been projecting. The EIA also said gasoline stocks increased by 100,000 barrels, which was below an expected rise of 1.1 million barrels and distillates added 900,000 barrels, falling short of the forecasted 1.8 million-barrel uptick.

Company News

After the closing bell, Visa ( V) said it earned 97 cents a share in the third quarter, as revenues rose to $2.03 billion and payment volumes grew. Wall Street analysts were looking for a profit of 93 cents a share, according to Reuters.

Tech security outfit Symantec ( V) did little to lift investors' spirits in the extended-trading session, reporting earnings of 35 cents a share, matching Street forecasts. Revenues came up short of estimates and investors sent shares plunging over 6% in late trading.

Boeing ( BA), Pfizer ( PFE), Home Depot ( HD) and Alcoa ( AA) put the most pressure on the Dow, while Verizon ( VZ), Caterpillar ( CAT) and Cisco ( CSCO) were the top performers. Exxon Mobil ( XOM) was finished 0.2% higher ahead of its second-quarter earnings report due out Thursday morning.

The health care sector was among session's weakest. Shares of Aetna ( AET) slipped 2.8% despite its recent earnings beat and year-end guidance that exceeded analysts' expectations. The health care benefits company also announced a deal with CVS Caremark ( CVS) in which CVS will provide Aetna's pharmacy benefits management services for 12 years starting Jan. 1.

Health benefits company WellPoint ( WLP) beat second-quarter profit expectations but said revenue fell 6.8% to $14.2 billion. The stock lost 3.8%.

Boeing reported a 21% decline in earnings but the company still beat estimates and reaffirmed guidance for year-end earnings between $3.50 and $3.80 a share. Sales are expected to be in the range of $64 million to $66 million.

Sprint Nextel ( S) posted a pro-forma loss of 15 cents a share, which was narrower than the loss of 20 cents a share that analysts had been expecting.

Sales of $8.03 billion were in line with estimates, and the company said it expects to deliver positive total net wireless subscriber additions during the rest of the year and have fewer net postpaid subscriber losses in the second half.

Wyndham Worldwide ( WYN) shares got a boost after the hotel operator raised its full-year guidance. Shares finished over 8% higher today.

A cadre of financial stocks, including Citigroup ( C), Bank of America ( BAC) and Wells Fargo ( WFC), traded lower today after Moody's Investor Services cleaved their outlooks late Tuesday.

Commodities and the Dollar

Following the EIA's report, crude oil for September delivery settled 51 cents lower at $76.99 a barrel.

Elsewhere in commodity markets, the August gold contract gained $2.40 to settle at $1,160.40 an ounce.

The dollar was trading fractionally higher against a basket of currencies, with the dollar index up by 0.01%.


A Treasury auction for $37 billion in five-year notes resulted in a high yield of 1.796% and an above average bid-to-cover ratio at 3.06, according to MarketWatch.

The benchmark 10-year Treasury was gaining 15/32, pushing the yield down to 2.996%.

The two-year note was ahead by 2/32, lowering the yield to 0.613%. The 30-year bond was up 8/32, decreasing the yield to 4.066%.

--Written by Melinda Peer and Sung Moss in New York.

If you liked this article you might like

DowDuPont, Sorrento Therapuetics, Lockheed Martin: 'Mad Money' Lightning Round

DowDuPont, Sorrento Therapuetics, Lockheed Martin: 'Mad Money' Lightning Round

The Sky Is Not Falling: Cramer's 'Mad Money' Recap (Tuesday 3/6/18)

The Sky Is Not Falling: Cramer's 'Mad Money' Recap (Tuesday 3/6/18)

Investing in Cryptocurrencies: How Blockchain Will Help Visa and MasterCard

Investing in Cryptocurrencies: How Blockchain Will Help Visa and MasterCard

Jim Cramer: Just a Lot of Good Around

Jim Cramer: Just a Lot of Good Around

24 Stocks Hedge Funds Are Loving Right Now

24 Stocks Hedge Funds Are Loving Right Now