Trader Daniel Trimble, left, and Joseph Lucchese, right, work on the floor of the New York Stock Exchange today.
ASSOCIATED PRESS Enlarge
NEW YORK — Stocks were mixed on Wall Street today as investors weighed signs of an improving economy against the prospect of the Federal Reserve cutting back on its economic stimulus.
Chegg, an online textbook rental company, flopped in its stock market debut, and clothing maker Perry Ellis plunged after cutting its revenue forecast because of weak sales. Macy’s rose after beating analysts’ earnings estimates.
The Federal Reserve is buying $85 billion of bonds a month to keep interest rates low and support the economy, helping drive a rally in stocks this year that has pushed indexes to record highs. Surprisingly strong reports on economic growth and hiring last week have led investors to speculate that the Fed may pare back its stimulus sooner than expected.
The stock market has fallen back this week from record levels as the number of companies reporting third-quarter earnings has slowed and in the absence of any major economic reports.
“We’re in a pause as everyone waits for more data,” said Kate Warne, an investment strategist at Edward Jones, an investment adviser. “There’s obviously a lot of speculation about when the Fed will decide to move.”
Investors will closely follow Thursday’s confirmation hearing for Janet Yellen, who has been nominated to succeed Fed Chairman Ben Bernanke, for clues about when the Fed may begin to reduce its economic stimulus.
The Dow Jones industrial average was down 14 points, or 0.1 percent, to 15,736 as of 12:30 p.m. Eastern time. It was down as much as 78 points earlier.
The Standard & Poor’s 500 index was up three points, or 0.2 percent, to 1,770. The Nasdaq composite rose 18 points, or 0.5 percent, to 3,938.
The market started lower but turned mixed by midday. Half of the 10 industry groups in the S&P 500 were down and the other half were up. Slightly more stocks rose than fell on the New York Stock Exchange.
The stocks of consumer companies got a lift from Macy’s, which jumped $4.35, or 9.3 percent, to $49.95.
In government bond trading, the yield on the 10-year Treasury note fell to 2.74 percent from 2.77 percent Tuesday.
About 90 percent of companies in the S&P 500 have now reported their third-quarter results, and earnings are projected to rise by 5.6 percent in the July-to-September period, according to S&P Capital IQ data. That’s better than the 4.9 percent growth recorded in the second quarter and better than the 2.4 percent growth in same period a year ago.
The strong trend in company earnings should help the stock market rebound from any sell-off induced by concerns that the Fed is set to cut its stimulus, said Dan Morris, Global Investment Strategist at TIAA-CREF, an asset management company.
“What really matters are earnings for corporations,” Morris said. “If people focus on that, it’s all pretty good.”
In commodities trading, the price of oil rebounded after a slump on Tuesday. Oil rose $1.27, or 1.3 percent, to $94.34 a barrel. Gold rose $1.25, or 0.1 percent, to $1,272.60 an ounce.
Among other stocks making big moves:
—Chegg dropped $2.37, or 19 percent, to $10.13 on its first day of trading.
— Potbelly Corp. rose $4.52, or 16.6 percent, to $31.55, after its third-quarter adjusted earnings came in ahead of market expectations. It was the restaurant operator’s first quarter as a publicly traded company.
— Perry Ellis fell $4.30, or 22 percent, to $15.18 after lowering its revenue forecast, citing fewer shipments and lower sales through its direct retail channel. The clothing company also cut its full-year forecast.