Stocks Lower a Day after Dow's Blip Above 13,000
NEW YORK (AP) — A day after Dow 13,000, investors took a break.
Stocks closed lower Wednesday for the first time in four trading days. The Dow Jones industrial average lost 27.02 points to finish at 12,938.67. The day before, it briefly passed 13,000 for the first time since May 2008.
Some investors worried about the details of a bailout deal reached for Greece this week. But analysts said investors were mostly in a holding pattern after seeing the market hit an important psychological mark.
"The market is pausing for the next slew of good news," said Doug Cote, chief market strategist at ING Investment Management. "The real U.S. economy continues to march along while the attention is on Europe."
On Thursday, the government will give the latest reading on unemployment claims. They have been declining steadily and fell last week to 348,000, the lowest since March 2008.
The Dow has lost ground on just four of the past 11 trading days. It's been trading at or near four-year highs for three weeks and is up 6 percent this year. Strong corporate earnings have been a key factor, Cote said.
On Wednesday, the Dow traded in a range of just 63 points. Over the past year, it has had smaller trading ranges on only nine other days. The average daily range over that time has been 181 points.
Financial stocks led the market lower. Investors worried that a $170 billion bailout for Greece, announced Tuesday, would not be enough to keep the debt-laden country from eventually defaulting and possibly leaving the euro currency group.
Greece says the bailout, plus an agreement it hopes to secure from investors to take losses on Greek government bonds, will keep it in the euro group. "There is no issue of the country's financial collapse," Finance Minister Evangelos Venizelos said.
The Greek economy is entering its fifth year of recession. Fitch ratings agency downgraded Greece further into junk status Wednesday, to a rating of C, one notch above default.
In the U.S., the Standard & Poor's 500 lost 4.55 points to close at 1,357.66. The Nasdaq composite index declined 15.40 points to 2,933.17. Volume was lighter than average, 3.6 billion shares.
All three major averages are well ahead for the year. The Dow is up 5.9 percent, the S&P 8 percent and the Nasdaq 12.6 percent.
"The market has done well in the face of some pretty low expectations," said Todd Salamone of Schaeffer's Investment Research. "Right now we're just seeing a few speed bumps."
Salamone said he believes investors will keeping focusing on negative news overseas despite better news on the U.S. economy. Last week, Congress extended a cut in the Social Security payroll tax, worth $1,000 for someone making $50,000 a year.
European markets closed lower. In Asia, stocks mostly rose even after a fairly weak Chinese manufacturing survey. The dollar rose to a seven-month high against the Japanese yen. U.S. Treasury prices edged higher, and the yield on the 10-year U.S. Treasury note fell to 2 percent from 2.05 percent.
Among U.S. stocks making big moves:
— Computer maker Dell fell 6 percent after reporting an 18 percent drop in first-quarter profit. The company was hurt by slow sales to government agencies, tough competition from Apple and flooding in Thailand that disrupted its supplies.
— Toll Brothers Inc., the luxury homebuilder, fell 5 percent after posting a quarterly loss. It did report more signed contracts and a bigger backlog, encouraging measures for coming months.
— Garmin Ltd., which makes GPS systems, jumped 9 percent after its quarterly net income rose 25 percent on higher prices and sales. The company's results and 2012 revenue forecast beat Wall Street's expectations.