Wall Street fades in choppy trade after week's wild start

Reuters  |  NEW YORK 

By Lewis Krauskopf

(Reuters) - U. S. stocks ran out of steam on Wednesday after an early surge, in a sign that investors are still spooked by the market's recent retreat and wary more fallout is to come.

In an up-and-down session, the benchmark 500 faded at the close after trading higher for much of the afternoon, following two days of big moves, including its largest single-day percentage loss in more than six years on Monday.

"Obviously there's a lot of concerned and nervous people. You might have had day traders trying to get out at the end of the day. Who knows what tomorrow brings," said Stephen Massocca, senior vice at in

While Wednesday's trading lacked the wild swings of the prior two sessions, the Dow industrials moved in a roughly 500-point range, more than three times the average daily swing over the past year.

"There are going to be people that are going to be selling into any kind of strength and then you are going to have some value-conscious investors taking advantage of these multiple 100-point drops," said Alan Lancz, of Alan B. & Associates, an investment advisory firm in Toledo,

"Now that everybody is on edge, you're going to see the swing in both directions," said.

The fell 19.42 points, or 0.08 percent, to 24,893.35, the 500 lost 13.48 points, or 0.50 percent, to 2,681.66 and the dropped 63.90 points, or 0.9 percent, to 7,051.98.

fell 1.4 percent, with down 2.1 percent, while dropped 1.7 percent as slumped. Gains for the industrials and financials sectors supported the market.

After regular cash trading on Wednesday, futures fell 1 percent, suggesting the negative tone would continue on Thursday.

The 500 had rebounded 1.7 percent on Tuesday, a day after its biggest drop since August 2011.

Investors were weighing whether the sharp swings were the start of a deeper move down or just clearing the way before a resumption of the aging bull market, which would turn nine on March 9.

The market's pullback came with concerns about rising bond yields and higher inflation, reinforced by Friday's January U.

S. jobs report that prompted worries the Federal Reserve will raise benchmark interest rates at a faster pace than expected this year.

"Although there are a couple of things in the way of perfect scenarios, that being interest rates and bond yields and what not, people are still looking at equities as a good investment and they still believe that there is going to be continued upside," said Peter Costa, of trading firm in

On Wednesday, the U. S. Senate reached a two-year bipartisan budget deal worth around $300 billion in an attempt to end the kind of squabbling over fiscal issues that has plagued for years.

Benchmark Treasury yields rose after the Treasury Department sold new 10-year notes to soft demand and the U. S. Senate reached a budget deal, possibly adding to pressure on stocks.

"The 10-year rate went back up ... so if you start making new territory there, that could start making people very nervous," Massocca said.

The Cboe Index, known as the VIX, fell 2.3 points to 27.73, but that was still more than twice levels generally seen in the past few months.

climbed 8.6 percent after casino mogul resigned as the chief executive following sexual misconduct allegations. owner soared 47.6 percent after it reported surging growth in users and revenue in its latest quarter.

About 9.1 billion shares changed hands in U. S. exchanges, compared with the 8 billion daily average over the last 20 sessions.

Advancing issues outnumbered declining ones on the NYSE by a 1.71-to-1 ratio; on Nasdaq, a 1.33-to-1 ratio favoured advancers.

The 500 posted three new 52-week highs and three new lows; the recorded 28 new highs and 42 new lows.

(Additional reporting by Caroline Valetkevitch, and in and Tanya Agrawal and Sruthi Shankar in Bengaluru; Editing by and James Dalgleish)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, February 08 2018. 04:10 IST