New York – Investors concerned about erratic oil prices and a slowing economy sent stocks lower Wednesday despite strong earnings from Cisco Systems Inc. and the Federal Reserve’s pause in raising interest rates.
The stock market fell as crude futures fluctuated widely during the session. After nearing record highs after the Energy Department reported falling crude inventories, light crude fell sharply to settle at $76.35 a barrel, up 4 cents, on the New York Mercantile Exchange.
Heavy industrial and transportation stocks, which are the bulk of the Dow Jones industrial average, sold off as investors grew worried that energy prices would bite deeply into those companies’ profit margins.
Investors also remained concerned because the Federal Reserve, while opting not to raise interest rates Tuesday, said it’s willing to raise rates should rising prices pose an increasing risk of inflation. A slowing economy combined with inflation is one of the more dismal scenarios for corporate profits.
In the end, the overall mix of news left most investors guessing, so while stocks surged higher in morning trading, they plummeted by late afternoon.
“It’s really such a mixed bag, and there’s so many strong signals that aren’t all that clear, and that’s why the market is bouncing around,” said Brian Bruce, director of global investments at PanAgora Asset Management Inc. in Boston. “Between oil and interest rates and earnings, it’s going to take a little time to see which of these factors are sustainable and drive the market going forward.”
The Dow fell 97.41, 0.87 percent, to 11,076.18 after having risen as much as 77.25 early in the session.
Broader stock indicators also moved lower. The tech-focused Nasdaq composite index slipped 0.57, or 0.03 percent, to 2,060.28. The S&P 500 lost 5.53, or 0.43 percent, to 1,265.95.
