The Dow and S&P 500 fell on Wednesday after Boeing Co said it expects a delay in deliveries of its Dreamliner jet and early corporate results prompted concern about the outlook for profits. The Nasdaq was up slightly, with Costco Wholesale Corp shares hitting an all-time high after the retailer reported robust earnings.
But outside the retail sector, several major companies ranging from makers of paper products to pet supplies suggested a slowing economy was taking its toll on corporate profits, sapping investor sentiment. Boeing, which pushed back deliveries of it's highly anticipated 787 Dreamliner, was the top drag on the Dow. Shares of Boeing's suppliers also fell, including Spirit Aerosystems, Honeywell International Inc and Rockwell Collins Inc.
"A lot of it was Boeing. It's an image thing, and the stock ran up a lot in anticipation of the Dreamliner," said Victor Pugliese, director of listed equity trading at First Albany Corp in San Francisco. Also, "Alcoa was a little disappointing," he said.
Aluminium company Alcoa Inc late on Tuesday reported earnings below analysts' estimates, while PetSmart Inc, the biggest US pet supplies retailer, cut its outlook early on Wednesday. The Dow Jones industrial average was down 85.84 points, or 0.61 percent, to end at 14,078.69. The Standard & Poor's 500 Index was down 2.68 points, or 0.17 percent, at 1,562.47. But the Nasdaq Composite Index was up 7.70 points, or 0.27 percent, to close at 2,811.61.
Pugliese said investors, too, were taking profits after Tuesday's big run up. The Dow and the S&P 500 closed at record highs on Tuesday after minutes from the Federal Reserve's last meeting showed inflation expectations were contained. PetSmart blamed weak consumer spending and adverse weather, sending its stock down 4.1 percent on Wednesday to $31.06 on the Nasdaq. Earlier, it fell as low as $29.15.
Shares of Alcoa slid 1.8 percent to $39.00 on the New York Stock Exchange. Boeing shares fell 2.7 percent to $98.68, while shares of Spirit Aerosystems fell 6.4 percent to $35.92, Honeywell declined 0.9 percent to $60.71 and Rockwell Collins dropped 2.4 percent to $74.04. In other earnings news, Chevron Corp joined companies issuing profit warnings. Its stock fell 0.8 percent to $92.08, making it among the top losers in the S&P 500. International Paper, which also warned about its profit outlook, fell 2.4 percent to $36.18.
But shares of Costco, the No 1 US warehouse club operator, rose 9.2 percent to close on Nasdaq at $69.13. Earlier, Costco climbed to a record high intraday at $69.95. Shares of Web search company Google Inc rose 1.7 percent to end at $625.39 on Nasdaq after hitting a record high intraday of $625.68 following news reports that Merrill Lynch raised its price target on Google Inc to $740.
Trading was lighter than normal on the NYSE, with about 1.16 billion shares changing hands versus last year's estimated daily average of 1.84 billion. On Nasdaq, about 1.97 billion shares traded, slightly below last year's daily average of 2.02 billion. Declining stocks outnumbered advancing ones by a ratio of about 17 to 16 on the NYSE and about 15 to 14 on the Nasdaq.
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