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US Stocks Fall Slightly After China Selloff

Stocks slipped Wednesday after Chinese stocks tumbled 5 percent, sending another ripple around the world.

The Dow dropped sharply at the opening bell but by mid-morning, it was down just 20 points.

"They seem to have peaked out before we did," Art Cashin told CNBC about the Chinese market. "They're a bit of a leading indicator."

This came after stocks rallied Tuesday, snapping a two-day losing streak that many market pros said might be the start of a correction.

Oil stocks jumped and crude prices climbed back above $70 a barrel after a surprise drop in crude suplies.

And mortgage applications rose last weekamid an increased demand for refinancing as mortgage rates slid to a five-week low.

As earnings season winds down, the market received a positive surprise from Deere, which easily beat Wall Street estimates on quarterly profit of 99 cents per share.

The numbers, though, were like many other companies this quarter with a beat in bottom-line profit but weak top-line revenue numbers. Traders soured on the stock after boosting it earlier.

Pharmaceuticals were among the bright spots, with Merck up 2 percent after a court upheld the patent on the firm's allergy drug Singulair, effectively blocking a generic version from India's Teva Pharmaceuticals.

UBS shares slipped after the Swiss bank agreed to hand over details of about 4,450 bank accounts to the US.

Shares of Dow component Hewlett-Packard fell about 2 percent after the company late Tuesday reported its profit dropped 19 percent, though it did make optimistic comments about consumer spending on PCs.

Analog Devices shares rose after three brokerages raised their price targets on the stock, saying they expect margins to improve in coming quarters.

Elsewhere in earnings, afternoon reports include JDS Uniphase and Limited Brands .

Alcoa has been under pressure this week as aluminum prices have tumbled. The Dow component continued to slide as aluminum prices fell more than 2 percent.

Billionaire investor Warren Buffett says the U.S. economy is "out of the emergency room" and on a slow path to recovery. Buffett makes his comments in an op-ed in Wednesday's New York Times.

- Peter Schacknow contributed to this article.

This Week:

WEDNESDAY: Weekly crude inventories; Earnings from Limited after the bell
THURSDAY: Weekly jobless claims; leading indicators; Philly Fed survey; Earnings from Gamestop, Hormel, and Sears
FRIDAY: Existing-home sales; Earnings from JM Smucker

Send comments to cindy.perman@nbcuni.com.