U.S. stocks closed lower on Wednesday as disappointing tech earnings weighted down on the three major indices. (Tweet This)
"Basically, it's a repeat of yesterday," said Peter Cardillo, chief market economist at Rockwell Global Capital, adding that only a handful of stocks are driving down the broader stock market.
U.S. stocks closed lower on Tuesday, with lackluster earnings from IBM and UTX sending the Dow Jones down 1 percent and the Nasdaq off its recent records.
"This week we're getting a mixed bag of earnings," said William Lynch, director of investments at Hinsdale Associates. "Expectations were low coming in and last week [earnings] came in better than expected."
"We're going to have to wait and see how the rest of earnings play out," Lynch said.
The Nasdaq Composite briefly fell more than 1 percent in the open before trimming losses to about 0.5 percent lower. The S&P and the Dow Jones industrial average also flirted with trading positive in midmorning trade. Nevertheless, the indices remained in negative territory throughout the session, with blue-chip stocks falling over 100 points at their lows.
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Apple closed about 4.29 percent lower, after plunging more than 6 percent in the open. Shares tumbled almost 7 percent to below its 200-day moving average in after-hours trade on Tuesday. The firm's fourth-quarter revenue forecast fell short of forecasts and it missed some targets for iPhone sales.
"Apple's taking 0.18 percent off the S&P 500, which means that without it, we'd be flat for the day," said Howard Silverblatt, senior index analyst at S&P Dow Jones, at around 3 p.m, when the index was down 0.18 percent.
Shares of Apple also exceeded their 30-day average trade volume of 43.77 million during morning trade.
The stock is a blue-chip component and the top-weighted Nasdaq 100 component.
Microsoft settled 3.74 percent lower. The stock fell more than 3 percent in late trading Tuesday after posting a $3.2 billion net loss for its fiscal fourth quarter ending June 30 following restructuring charges.
"I think there's been a lot of head-scratching about the direction the company seems to be taking," said Kim Forrest, senior equity analyst at Fort Pitt Capital, referring to the company's recent moves and its conference call from Tuesday. "But I like the direction they're going."
Apple 5-day chart
With the Nasdaq near records, "we definitely think the market is focusing on technology and with Apple missing on their forecast that's going to have an impact short-term. But long-term I see it as a buy opportunity," said Mario Minotti, president of the Mario P. Minotti Group.
Corporate reports before the open Wednesday were slightly more encouraging.
Boeing briefly gained more than 2.5 percent before paring gains. The firm reported earnings that beat on both the top and bottom lines. The aircraft maker did reduce its full-year EPS guidance by 50 cents on both the high and low end, but that reduction was less than the 77 cent charge announced last week for a redesign of its tanker program.
Coca-Cola beat estimates by 3 cents with adjusted quarterly profit of 63 cents per share, with revenue also above Street estimates. Worldwide case volume was up 2 percent, more than analysts had been expecting.
Commodities also remained in focus, with gold extending losses to trade below $1,100 an ounce and crude oil near $50 a barrel.
"I think a lot of it has to do with China because they are a huge consumer of commodities," said Randy Frederick, managing director of trading and derivatives at Charles Schwab, adding that recent weakness in the Chinese economy has led the nation to lower commodities consumption.
Crude oil futures for September delivery settled down $1.67 at $49.15 a barrel on the New York Mercantile Exchange after the Energy Department said oil inventories rose by about 2.5 million barrels. Wednesday's settlement marked U.S. oil's first settle below $50 a barrel since April 2.
Gold futures settled down $12 to $1,091.50 an ounce, extending its losing streak to 10 session, its longest since 1996. Wednesday also marked the first time since March 25,2010 that gold closed below $1,100.
One beneficiary of the downward trend within the commodities space on Wednesday trade was Chipotle, said Art Hogan, chief market strategies at Wunderlich Securities, as lower oil translates into higher consumer spending at restaurants.
"If you look at any shortfall Chipotle had ... it was offset by a lower commodities complex," he said.
Chipotle shares ended 7.84 percent higher despite the company reporting weaker-than-expected same-store sales growth for last quarter.
In economic news, U.S. home prices rose 0.4 percent in May from April, up from 5.7 percent a year ago, FHFA said.
Existing home sales rose 3.2 percent from the previous month in June, their highest levels in over eight years.
"Bottom line, as also seen in the 18% y/o/y increase in mortgage applications to buy a home, the spring/summer selling season was a good one relative to others in this recovery," Peter Boockvar, chief market analyst at The Lindsey Group, said in a note.
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Treasury yields were mixed, with the 10-year slightly lower at 2.32 percent and the 2-year higher at 0.71 percent.
The U.S. dollar edged higher against major world currencies, with the euro near $1.090 and the yen weaker against the greenback near 124 yen.
Overseas, Greece's parliament is due to vote on Wednesday on a second set of reforms that lenders have demanded in exchange for further bailout funds.
Greek Prime Minister Alexis Tsipras faces a growing revolt within his anti-austerity Syriza party over the legislation.
European stocks ended Wednesday trading in the red.
The ended down 5.07 points, or 0.24 percent, at 2,114.14, with information technology leading six decliners and financials the greatest advancer.
The Nasdaq settled down 36.35 points, or 0.7 percent, at 5,171.77.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 12.
About four stocks declined for every three advancers on the New York Stock Exchange, with an exchange volume of 836.7 million and a composite volume of 3.660 billion at the close.
—CNBC's Peter Schacknow contributed to this report.
On tap this week:
Earnings: American Express, Texas Instruments, Cheesecake Factory, Discover Financial, SanDisk, Qualcomm, Fortune Brands, Raymond James, Newmont Mining, Ameriprise, Cirrus Logic, Graco, Sallie Mae, Select Comfort, Morningstar, Weatherford, Xilinx, F5 Networks
Earnings: Caterpillar, Eli Lilly, Amazon.com, General Motors, Comcast, McDonald's, Starbucks, Visa, Capital One, Bristol-Myers Squibb, Union Pacific, Roche Holdings, Dow Chemical, Celgene, Credit Suisse, Dr. Pepper Snapple, Alaska Air, Southwest Air, Dunkin Brands, Pulte, Raytheon, Freeport-McMoran, Stryker, Nasdaq OMX, Kimberly-Clark, Stryker, Pandora, Flextronics, Ruby Tuesday
8:30 a.m. Initial claims
Earnings: Biogen, Johnson Controls, State Street, Xerox, Moody's, Cabot Oil and Gas, Spirit Airlines
9:00 a.m. Markit Manufacturing PMI
10:00 a.m. New home sales
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