The S&P 500 and the Nasdaq fell on Wednesday as signs of increasingly sluggish growth in the United States and the rest of the world rattled investors already unsettled about the outlook for consumer spending and corporate profits. The Dow eked out a modest gain, however, helped by Home Depot.
The home improvement retailers' shares rose 4.5 percent after its chief executive said the battered US housing market's decline may be nearing an end. And General Motors Corp, another Dow component, said it thinks it has seen the bottom of the downturn in the auto industry, as well as indications that the housing market is near bottom.
Shares of wireless companies fell, weighing on the Nasdaq, after comments from mobile chipmaker Qualcomm's chief executive and J.P. Morgan analysts fuelled concerns that the demand for cell phones is slowing. A continued decline in the price of oil failed to spark optimism, with investors instead calling it yet another symptom of slowing global demand.
The Federal Reserve said in its Beige Book report that economic activity has been slow across most of the United States in recent weeks, though there has been some relief from high commodity and energy prices.
"There are global economic concerns and that has spilled right over into the US markets," said Fred Dickson, market strategist at D.A. Davidson & Co in Lake Oswego, Oregon. The Dow Jones industrial average rose 15.96 points, or 0.14 percent, to 11,532.88, while the Standard & Poor's 500 Index dropped 2.59 points, or 0.20 percent, to 1,274.99.
The Nasdaq Composite Index was down 15.51 points, or 0.66 percent, at 2,333.73. European data showed that falling investment and private consumption led to the first-ever quarterly contraction in the euro zone economy, fuelling fears of a recession in the region.
Shares of Qualcomm, a maker of chips for wireless technology, fell 3.7 percent to $49.26 and were the top drag on the Nasdaq 100. The company's CEO told CNBC that consumer cell phone upgrades were slowing, and a J.P. Morgan analyst cut his forecast for mobile phone sales for the rest of the year, citing economic weakness.
Also on Wednesday the finance chief of chip maker Texas Instruments Inc cited a subdued mobile market, sending its shares down 3.9 percent to $23.49. Shares in BlackBerry maker Research In Motion fell 3 percent to $114.78 as investors worried that cellphone demand would fall short of expectations for the holiday shopping season. An index of semi-conductor stocks fell 4.2 percent.
Shares of Corning, the world's largest maker of glass for liquid crystal display televisions and computers, slid 12.6 percent to $17.05 after the company slashed its third-quarter profit outlook.
Financial shares rose, however, limiting losses on the Dow and the S&P 500. Lehman Brothers shares gained 5 percent after South Korea's Daily Chosun Ilbo newspaper reported that top European bank HSBC Holdings is among potential buyers of the fourth-ranked US investment bank.
Trading was low on the New York Stock Exchange, with about 1.2 billion shares changing hands, below last year's estimated daily average of roughly 1.9 billion, while on Nasdaq about 2.12 billion shares traded, also short of last year's daily average of 2.17 billion. Advancing stocks outnumbered declining ones by about 16 to 15 on the NYSE and by 15 to 13 on the Nasdaq.