By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks fell on Wednesday,
extending losses into a third session, as Wall Street worried about
the timing of cuts in the Federal Reserve's $85 billion in monthly
bond purchases.
"We've enjoyed a strong seasonal tailwind the last few months
that's going to turn into a headwind in what is typically a weak
season for stocks. Plus, corporate earnings for the second quarter
were basically flat," said Bruce Bittles, chief investment
strategist at R.W. Baird & Co.
And while equities are reacting to the idea of Fed "tapering in
September," Bittles does not think the central bank will reduce
stimulus this year, given the still weak labor market.
"Most of the jobs created this year are part-time, that's why I
say I think the economy is still suspect," he said. Read an
opposing view from Goldman Sachs on September tapering.
Off session lows that had it down 97 points, the Dow Jones
Industrial Average (DJI) was more recently off 57.63 points, or
0.4%, at 15,461.11, with Walt Disney Co. (DIS) pacing blue-chip
declines that included 22 of its 30 components. The entertainment
company fell 2% after reporting fiscal third-quarter profit little
changed from the year-ago period.
Also weighing on the Dow, shares of Bank of America Corp. (BAC)
fell 1.9%, a day after the Department of Justice filed suit against
the bank for allegedly misleading investors about loans linked to
mortgage-backed securities.
The S&P 500 index (SPX) shed 10.59 points, or 0.6%, to
1,686.78, with financials falling hardest among its sectors.
The market is overbought after a six-week run higher, but much
of the fretting over the Fed's monetary moves is already priced in,
which is "why this decline shouldn't carry that far," said
Bittles.
The index declined 0.6% on Tuesday after Fed Bank of Chicago
President Charles Evans said the central bank could start easing
its asset buys as soon as September.
The Nasdaq Composite (RIXF) declined 17.13 points, or 0.5%, to
3,648.65.
For every share gaining, more than two fell on the New York
Stock Exchange, where 228 million shares traded by 12:45 p.m.
Eastern. Composite volume exceeded 1.5 billion.
First Solar Inc. (FSLR) fell 13% after the solar-panel
manufacturer reported a profit drop in the second quarter.
Zillow Inc.'s (ZILLOW.XX) hares dropped 7.4% after the
real-estate information site reported a second-quarter loss. Read
Wednesday's Movers & Shakers.
Time Warner Inc. (TWX) climbed 2.1% after the entertainment
provider reported larger-than-expected quarterly revenue.
AOL Inc. (AOL) shares gained 1.6% after the Internet company
reported better-than-expected revenue for the second quarter and
said it would buy Adap.tv, a video advertising platform, for $405
million.
Ralph Lauren Corp. (RL) declined 6.2% after the clothing
retailer projected quarterly profit beneath estimates. (Read more
in Behind the Storefront:
http://blogs.marketwatch.com/behindthestorefront/2013/08/07/ralph-lauren-results-shock-spoiled-investors/.)
Computer Sciences Corp. (CSC) rose 6.3% a day after the
technology consultant hiked its earnings outlook.
The dollar (DXY) edged lower against the currencies of major
U.S. trading partners including the yen (USDJPY) , while Treasury
prices rose, lowering the yield on the 10-year note 2 basis points
to 2.618%.
Oil prices slipped, with the September crude futures (CLU3)
contract down 45 cents, or 0.4%, at $104.85 a barrel on the New
York Mercantile Exchange.
Gold futures turned higher, with the futures contract for
December delivery (GCZ3) up $2.50, or 0.2%, to $1,285 an ounce on
the Comex.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires