NEW YORK - Major stock indexes closed mixed Wednesday as investors weighed conflicting economic reports and assessed the outlook for the Federal Reserve’s economic stimulus program.
The Dow Jones industrial average fell 24.85 points, or 0.2 percent, to 15,889.77. The S&P 500 index fell 2.34 points, or 0.1 percent, to 1,792.81. The Nasdaq composite edged up 0.80 point to 4,038.
The market was lower in early trading after a payroll company reported that U.S. businesses added the most jobs in a year last month as manufacturing and construction expanded. Investors worried that this latest sign of economic expansion could mean that the Fed will pull back on its stimulus sooner than previously expected.
Indexes reversed course in midmorning trading after another survey showed weakness in the U.S. service sector last month. The Institute for Supply Management said its service-sector index fell to the lowest level since June, indicating that cautious spending by consumers and businesses may be slowing growth.
By midday stocks began sliding again and the Standard & Poor’s 500 index closed lower for the fourth-straight day, its longest losing streak in more than two months.
The latest bout of investor anxiety about the Fed’s plans for its stimulus program comes ahead of the government’s closely watched monthly employment report due out Friday. The Fed’s $85 billion in monthly bond purchases have been supporting financial markets and giving investors an incentive to buy stocks by making bonds seem relatively expensive. The Fed’s program is aimed at supporting the economy by keeping long-term interest rates very low to encourage borrowing and hiring.
After surging this year, stocks have had a slow start to December, statistically one of the strongest months for the market. The S&P 500 index has dropped 0.7 percent so far, paring its annual gain to 25.7 percent. The big gains have left some investors nervous about adding to their holdings, lest they buy at the peak in the market.
“Things have been up and down,” said Bob Gavlak, a wealth adviser with Strategic Wealth Partners. “There’s some general angst about whether the market is overvalued and when is it going to come back down.”
Sears was among the biggest losers Wednesday.
The stock fell $4.63, or 8.3 percent, to $50.92 after the company’s chief executive officer, the billionaire hedge fund manager Eddie Lampert, reduced his stake in the department-store chain to less than half.
CF Industries was the biggest gainer in the Standard & Poor’s 500 index, surging $22.88, or 10.7 percent, to $237.07 after the fertilizer company told investors that it was evaluating whether to increase its dividends over time and said it expected to have “significant” additional cash to give to shareholders.
The yield on the 10-year Treasury note climbed to 2.84 percent from 2.78 percent Tuesday, resuming its upward trajectory on signs that the economy is maintaining its recovery. In September the yield climbed as high as 3 percent amid speculation that the Fed was set to announce that it would cut back on its economic stimulus.
Business, Pages 27 on 12/05/2013