Stocks End Flat Ahead of ECB; Nokia Plunges
Stocks ended narrowly mixed after moving between small gains and losses for most of the session Wednesday as investors remained cautious ahead of a crucial ECB meeting later this week.
"Stories out of Europe in reference to the ECB keep coming out, but market players are probably tired of running on rumors and want to see the “real deal” before making commitments for more than a few hours," wrote Elliot Spar, senior vice president at Stifel Nicolaus, in his daily note.
The Dow Jones Industrial Average eked out a gain of 11.54 points, or 0.09 percent, to close at 13,047.48, led by Disney.
The S&P 500 erased 1.50 points, or 0.11 percent, to finish at 1,403.44. The Nasdaq slipped 5.79 points, or 0.19 percent, to end at 3,069.27.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, ended below 18.
Among the key S&P sectors, materials gained, while utilities lagged.
Traders will be paying close attention to the ECB meeting on Thursday at which president Mario Draghi is expected to announce a bond-buying program to help countries such as Spain and Italy lower their borrowing costs. European stocks initially saw a small boost after a report that Draghi would propose unlimited bond buying at the meeting. But an ECB spokesman declined to comment on the report. (Read More: Fed Watching ECB Just as Closely as Markets Are)
“Everyone’s looking ahead to the ECB, but until the German high court's [decision on September] 12, the ECB’s going to be handcuffed,” said Kenny Polcari, managing director of ICAP Equities. “Tomorrow, the ECB might [come out with] a program that announces some bond buying but it’s not going to be the big bazooka that [Draghi] promised, so there’s a potential that the market’s going to be disappointed.”
Meanwhile, a survey showed that the euro zone is likely to have slipped back into recessionin the current quarter, with Germany's composite PMI indicating the lowest reading since June 2009.
“Most investors appear optimistic that the Fed and the ECB have tools to stabilize their economies but it seems that some may also be positioning for some type of action from China, which could have a very meaningful impact on global growth,” said Steve Neimeth, portfolio manager at SunAmerica Asset Management. “Data from China over the past week have weakened materially and the probability that they launch some type of stimulus plan has increased dramatically.”
The Shanghai Composite closed down in August for the fourth-consecutive month, its longest monthly losing streak since 2004.
FedEx slumped after the package-delivery company slashed its fiscal first-quarter forecast, citing the weak global economy. At least six brokerages cut their price targets on the economic bellwether, while Wells Fargo lowered its rating on the company to "market perform." Rival UPS also declined. (Read More: Why FedEx's Warning May Be Bad Sign for Stocks)
In the latest flurry of mobile-device launches, Nokiareleased two smartphones, which run on the latest Windows Phone operating software, in an effort to win back lost market share from the likes of Apple, Samsung and Google. Still, shares of the Finnish cellphone maker plunged nearly 15 percent following the announcement.
Also among smartphone makers, Google's Motorola launched the next generation of Droid Razor smartphonesavailable exclusively on Verizon .
The new devices come a week before Apple's event where the tech giantis expected to unveil its new iPhone. JPMorgan raised its price target on Apple to $770 from $675. (ReadMore: What's Behind This Tech Season's Launch Blitz?)
Yelp jumped after the company's CEO Jeremy Stoppleman said that the click-through rate on mobile web traffic is "significantly higher" than on PCs and that the company is positioned to “grow for a long time,” speaking at the Citi Technology Conference.
Meanwhile, Zynga advanced after the social gaming company released a sequelto its 2009 hit videogame, "Farmville," built entirely in 3-D.
Facebook rose after CEO Mark Zuckerberg said he has no plans to sell his shares for at least 12 months, according to a SEC filing. Shares hit an all-time low on Tuesday, falling more than 50 percent below its IPO price.
Among earnings, Dollar General gained after the retailer reported a bigger-than-expected increase in earnings and boosted its profit forecast for the year.
On the economic front, productivity increased at a much faster ratethan previously thought in the second quarter, according to the Labor Department.
Weekly mortgage applications declined last week as demand for refinancing continued to slow and new home loans fell, according to the Mortgage Bankers Association.
—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter:
Coming Up This Week:
THURSDAY: Challenger job-cut report, ADP employment report, jobless claims, ISM non-mfg index, quarterly services survey, oil inventories, NY fashion week starts, Amazon.com press conference; Earnings from Hovnanian
FRIDAY: Gov't jobs report; Earnings from Kroger, Lululemon
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