Stocks declined on Wednesday after uninspiring earnings from IBM and Intel, while Chesapeake Energy sank after a Reuters report highlighted that its CEO has taken out large and unusual personal loans.
Chesapeake Energy Corp
Trading in the company's stock outstripped even Bank of America, with its massive share float and was approaching nearly triple the recent daily average by midday. The stock was trading at $17.78. Earlier, the stock touched a session low at $17.17, its lowest since July 2009. Shares of natural gas companies have been hit recently by falling natural gas prices.
I think where there is smoke, there may be fire, and investors are still in a shoot-first mentality, said David Lutz, a trader at Stifel Nicolaus in Baltimore.
International Business Machines Corp
The lackluster reports from the two technology heavyweights came at the start of what has so far been a strong earnings season. The S&P 500 had its best day in a month on Tuesday as Coca-Cola Co
Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville, Tennessee, expects the market to continue its back-and-forth moves, possibly trending lower in the second quarter after strong gains earlier in the year.
A consolidation or correction phase in the second quarter would make the most sense, and probably it would be the most healthy thing for the market, he said.
Market breadth was worse than the relatively slight losses suggested by the afternoon. On the New York Stock Exchange, two stocks declined for every one that rose.
The Dow Jones industrial average <.DJI> dropped 66.86 points, or 0.51 percent, to 13,048.68. The Standard & Poor's 500 Index <.SPX> fell 4.74 points, or 0.34 percent, to 1,386.04. The Nasdaq Composite Index <.IXIC> lost 12.96 points, or 0.43 percent, to 3,029.86.
IBM lost 2.9 percent to $201.43 and Intel fell 1.9 percent to $27.93. The PHLX semiconductor index <.SOX> dropped 1.1 percent.
U.S.-listed shares of Argentina's YPF
On the earnings front, 22 companies in the S&P 500 were expected to report results on Wednesday, according to Thomson Reuters data, with American Express Co
Of the 56 S&P 500 companies reporting through Wednesday morning, 79 percent beat Wall Street's estimates.
Investors should not overreact to positive news nor should they be overreacting to really what could be viewed as isolated earnings reports. One report does not make a trend, unfortunately, said Tim Speiss, a partner at EisnerAmper in New York.
In the M&A arena, SXC Health Solutions Corp
Genworth Financial Inc
Berkshire Hathaway Inc's
(Reporting By Edward Krudy; Editing by Jan Paschal)