Stocks Down as Two-Day Rally Peters Out

NEW YORK (AP) -- Stocks pulled back on Wednesday and gave back some of their gains from a day earlier, when the Standard & Poor's 500 index had one of its best days of the year.

The market started the morning broadly lower, but the losses moderated as the day progressed. Prices for Treasury bonds and gold rose modestly as investors sought safer ground.

KEEPING SCORE: The Standard & Poor's 500 index fell 4 points, or 0.2 percent, to 2,448 shortly before noon Eastern time. It gave back a sixth of its big gain from Tuesday. The S&P 500 had been on a two-day winning streak after pulling out of a nearly two-week slump caused by worries about politics in Washington and abroad.

The Dow Jones industrial average fell 39 points, or 0.2 percent, to 21,861, and the Nasdaq composite lost 9, or 0.1 percent, to 6,289.

The Russell 2000 index of small-cap stocks was up 0.1 percent after being down as much as 0.6 percent earlier in the morning.

MORE MIXED MARKET: Early in the morning, losses were widespread, with nine of the 11 sectors that make up the S&P 500 weaker. By late morning, though, only five of the 11 sectors were down, and more stocks were rising on the New York Stock Exchange than falling.

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HAMMERED: Lowe's had one of the biggest losses in the S&P 500 after it said profit and revenue were weaker last quarter than analysts expected. It also gave a profit forecast for the year that fell below Wall Street's expectations. Lowe's dropped $4.74, or 6.3 percent, to $71.08.

A report showing that sales of new homes were weaker in July than economists expected didn't help.

POLITICS AND PROSE: Worries about politics were a big reason for the market's stumbles in recent weeks. In Washington, the concern is about whether the government can push through tax cuts and other pro-business policies that were considered slam dunks early this year. The government is also coming close to crucial deadlines, including one to increase its borrowing authority in order to avoid a default on its debt and another to prevent a government shutdown.

In a speech late Tuesday, President Donald Trump said that "if we have to close down our government, we're building that wall" that he wants on the border between Mexico and the United States. He also said that he thinks the U.S. government will "end up probably terminating" the North American Free Trade Agreement with Canada and Mexico, though he also said that he has yet to make up his mind.

CENTRAL BANK WATCH: Besides Washington, markets are also looking toward the mountains of Wyoming, where central bankers from around the world will meet at the end of the week.

The heads of the Federal Reserve and the European Central Bank are expected to speak at the symposium, which begins Thursday. Tremendous aid from those two and other central banks around the world have helped to drive prices for all kinds of investments higher since the Great Recession, and investors are waiting to hear if any change is upcoming.

The Fed has already begun raising interest rates and is preparing to pare back the $4.5 trillion in Treasurys and other investments it's amassed.

YIELDS: Prices for Treasurys rose, which in turn pushed down yields. The 10-year Treasury yield fell to 2.18 percent from 2.21 percent late Tuesday. The two-year yield dipped to 1.31 percent from 1.33 percent, and the 30-year yield dropped to 2.76 percent from 2.79 percent.

MARKETS ABROAD: European markets dipped, with the French CAC 40 down 0.3 percent, Germany's DAX down 0.5 percent and the FTSE 100 in London close to flat.

In Asia, Japan's Nikkei 225 rose 0.3 percent, while South Korea's Kospi was virtually flat.

CURRENCIES: The dollar fell to 109.16 Japanese yen from 109.52 yen late Tuesday. The euro rose to $1.1802 from $1.1752, and the British pound fell to $1.2789 from $1.2828.

COMMODITIES: Benchmark U.S. crude oil rose 51 cents to $48.34 per barrel. Brent crude, the international standard, rose 58 cents to $52.45 per barrel.

Gold rose $1.80 to $1,292.80 per ounce, silver was close to flat at $16.99 per ounce and copper slipped a penny to $2.98 per pound.

Natural gas fell 1 cent to $2.93 per 1,000 cubic feet, heating oil rose 3 cents to $1.63 per gallon and wholesale gasoline was up 2 cents at $1.61 per gallon.

(BE)

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