NEW YORK - Stocks ended mixed Wednesday as investors waited for the government’s jobs report later this week and the beginning of quarterly earnings releases from corporate America.
The Dow Jones industrial average fell 68.20 points, or 0.4 percent, to 16,462.74. The losses erased more than half of the 105-point gain the index had on Tuesday.
The Standard & Poor’s 500 index fell 0.39 point, or less than 0.1 percent, to 1,837.49, and the Nasdaq composite rose 12.43 points, or 0.3 percent, to 4,165.61.
Traders put aside a positive report that showed private employers created more jobs in December than economists had expected. The market had a muted reaction to the minutes from the Federal Reserve’s mid-December policy meeting. At the meeting, Fed officials voted to begin slowly tapering its bond-buying program.
“I suspect from the minutes that there might be a bias towards pulling back stimulus sooner rather than later,” said Brad McMillan, chief investment officer for Waltham, Mass.-based Commonwealth Financial Network. “There seems to be a fairly wide consensus that stimulus should be gradually taken out.”
Wednesday’s declines extend what has been a muddled start to 2014. Both the Dow Jones industrial average and the S&P 500 index are down a little less than 1 percent after five days of trading.
The tough start should be taken in context of last year’s exceptional performance, when the S&P 500 surged almost 30 percent.
After bidding up companies’ stock prices to record levels last year, investors are ready to see if their bets are going to pay off. Big, publicly traded U.S. companies will start reporting their quarterly financial results today.
“The question is whether this strengthening economy is translating into stronger corporate earnings,” said Russ Koesterich, global chief investment strategist at the investment firm BlackRock.
Dow member and oil giant Chevron will report after the closing bell today, as well as former Dow member and aluminum company Alcoa. Next week investors will have results from Goldman Sachs, JPMorgan Chase, General Electric and American Express.
“Earnings will determine what’s next for the stock market,” said Lawrence Creatura, a portfolio manager with Federated Investors.
Another theme on investors’ agendas is jobs.
A private survey released Wednesday showed U.S. businesses added the most jobs in a year in December, powered by a big gain in construction work. Payroll processor ADP said companies added 238,000 jobs in December, better than the 200,000 economists predicted.
The ADP data sets the stage for Friday’s government jobs report. Investors expect the U.S. economy created 190,000 jobs last month and the unemployment rate remained steady at 7 percent.
S&P Capital IQ’s Alec Young said he expects the stock market will “churn” at these levels into next week, once investors have earnings and Friday’s jobs report to analyze.
“We’re looking at a situation where equities are still likely to outperform most other markets,” said Cam Albright, director of asset allocation at Wilmington Trust Investment Advisors. “The question is whether if we see a jump in growth in jobs, is that going to accelerate the tapering process?”
In company news:
Ford shares rose 16 cents, or 1 percent, to $15.54 after Chief Executive Officer Alan Mulally said he would not leave to run Microsoft. Mulally was considered a top candidate for the position, having led the turnaround for Ford during the financial crisis.
Shares of Forest Labs jumped $10.54, or 18 percent, to $69.30 after the company said it would buy Aptalis, which specializes in treatments for gastrointestinal problems and cystic fibrosis, for $2.9 billion in cash.
Information for this article was contributed by Nick Taborek of Bloomberg News.
Business, Pages 24 on 01/09/2014