Closing Bell: Stocks End Lower for Third Straight Session on Fed Fears

Sandra Pianalto Federal Reserve Bank Cleveland stimulus stocks economy
Jay LaPrete/Bloomberg via Getty ImagesFederal Reserve Bank of Cleveland President Sandra Pianalto
Stocks fell for a third straight day Wednesday after several companies released weak earnings reports, and amid growing uncertainty about when the Federal Reserve will begin to wind down its stimulus, which has helped propel stocks to record highs this year.

In the latest comment from Fed officials, Federal Reserve Bank of Cleveland President Sandra Pianalto said the central bank would be prepared to scale back asset purchases if the labor market remains on the stronger path followed since last fall.

The Dow Jones industrial average (^DJI) lost 48 points to close at 15,470, the Standard & Poor's 500 index (^GPSC) fell 6 points to 1,690 and the Nasdaq composite index (^IXIC) slipped 11 points to 3,654.

Walt Disney was among the biggest drags on blue chip stocks. Shares of Disney (DIS) fell 1.7 percent to $65.91 after projecting a massive loss related to its film "The Lone Ranger" on Tuesday, though adjusted earnings slightly beat expectations.

In separate lawsuits filed Tuesday, the Justice Department and the Securities and Exchange Commission said Bank of America (BAC) failed to tell investors about the risks involved in a 2008 sale of mortgage-backed bonds. Bank of America, the country's second-largest bank, slipped 11 cents Wednesday, to end at $14.53.

In automotive news, Chrysler said it plans to hire 300 workers at two Michigan engine plants to build the company's Tigershark engines, used in the Dodge Dart compact and likely to power new Chrysler cars in the future. The automaker, which is majority-owned by Italy's Fiat, will spend $52 million for the plant upgrades, which are scheduled to be completed by the end of the current quarter.

Also, Ford (F) said that even though it's having difficulty supplying dealers with some of its more popular models, it isn't planning to build any new factories. The automaker's North America manufacturing chief, Jim Tetreault, says his mandate is to squeeze more production out of existing plants to avoid the high cost of new bricks and mortar. Some plants are operating near capacity.

U.S. consumer credit rose less than expected in June, held back by the largest decline in credit card use in a year as households continue to pay down debts. Total consumer installment credit increased by $13.8 billion to $2.8 trillion, Federal Reserve data released Wednesday showed.

An uncertain economy and new financial pressures are expected to temper retail sales for the back-to-school season for many major retailers, a Citi analyst said. Shares of major retailers were mostly down for the day, along with the broader markets. Here's how some fared:
  • American Eagle Outfitters (AEO) shares fell 3.8 percent, to $16.90.
  • Macy's (M) shares fell 61 cents to reach $47.83
  • Target (TGT) stock slipped 11 cents to $71.68.
  • Walmart Stores (WMT) shares dropped 3 cents to $77.37.
  • J.C. Penney (JCP) fell 3.6 percent to reach $12.80.
  • Kohl's (KSS) shares fell more than 1 percent to $50.96.
More Stocks in the News:
  • Ralph Lauren Corp. (RL) slumped 8.6 percent, to $173.13. Sluggish sales led the luxury retailer to report a drop in quarterly income early Wednesday. The company also gave a cautious sales forecast.
  • First Solar (FSLR) plunged more than 13 percent to $40.47. The company posted results late Tuesday that fell short of Wall Street expectations and cut its profit outlook.
  • Zillow (Z), which operates a real-estate website, took a 7.7 percent hit, falling to $83.73. After the market closed Tuesday, the company reported a loss in the second quarter as its costs nearly doubled.
  • Toyota Motor (TM) said it is recalling 342,000 Tacoma midsize pickup trucks to fix a problem with the seat belts. The recall affects Access Cab models made from 2004 to 2011. In trading Wednesday, Toyota shares dipped 1.6 percent to $127.56.
What to Watch Thursday:
  • Selected chain retailers release July sales.
  • The Labor Department releases weekly jobless claims at 8:30 a.m. Eastern time.
  • Freddie Mac releases weekly mortgage rates at 10 a.m.
These major companies are scheduled to report quarterly earnings
  • Apollo Group (APOL)
  • Cooper Tire (CTB)
  • Dean Foods (DF)
  • MBIA (MBI)
  • (PCLN)
  • T-Mobile US (TMUS)
  • Visteon (VC)
-Compiled from staff and wire reports.

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I don't think i agree

November 06 2013 at 3:11 PM Report abuse rate up rate down Reply

When the $ collapses, the feds will be in your backyards with their metal detectors-

August 07 2013 at 10:07 PM Report abuse rate up rate down Reply

The value of the dollar has shrunk due to Bernake printing funny money calling it stimulus. Wall Street loves the uncertanity. Remember, they get paid by tranaction up or down pays the same.

August 07 2013 at 9:27 PM Report abuse +1 rate up rate down Reply
1 reply to jhrooney's comment

We liberals don't care as long as we get ours. We don't think we'll ever run out of other people's money. We live in a fool's paradise.

August 07 2013 at 9:54 PM Report abuse +2 rate up rate down Reply

Short the crude/gas futures, commodity investigation coming to a floor near you....

August 07 2013 at 8:16 PM Report abuse -1 rate up rate down Reply

Maybe instead of watching the Fed or Wall Street you should be watching the metals market for what is comming. Fed prints phony money and the street rides that wave. The metals market is saying other things. The metals, such as the ferrus and non-ferrus, show what direction the economy is really going in, and this market has been receding over the last quarter. And for the slow, metals like this help create the durable goods that really rally an economy and that market is dropping and Obama is lying.

August 07 2013 at 8:11 PM Report abuse +3 rate up rate down Reply
1 reply to Craigermt's comment

We liberals hate truth like that.

August 07 2013 at 8:14 PM Report abuse +1 rate up rate down Reply

I see Evan has been here with his magic minus wand.

August 07 2013 at 8:02 PM Report abuse +1 rate up rate down Reply

Hard times shouldn't last a person's entire life, atty...........and into generation after generation.

August 07 2013 at 7:58 PM Report abuse +1 rate up rate down Reply
Antoine Fanouvi

Obama Obama! tu n'est qu un lache.

August 07 2013 at 7:57 PM Report abuse rate up rate down Reply
1 reply to Antoine Fanouvi's comment

Ormay igpay atenlay?

August 07 2013 at 8:07 PM Report abuse +1 rate up rate down Reply

mac, you are fooling yourself. Stop getting your info from looney lib web sites.

August 07 2013 at 7:57 PM Report abuse -1 rate up rate down Reply

Give me all the negative you want,,,,I love it,,,I sleep good at night,,,get up early in the morning too.!!! I have more get up and go that the youth today.!!!!!
Take away there electronic toys,,,,they are lost.!!!!!

August 07 2013 at 7:54 PM Report abuse +1 rate up rate down Reply