Stocks' record run on the skids
Disappointing Intel, Yahoo earnings, and subprime fears send major gauges lower.
NEW YORK (CNNMoney.com) -- Stocks broke from their record-setting run Wednesday, following disappointing results from tech giants Intel, Yahoo, renewed fears about the subprime mortgage sector.
The Dow Jones industrial average (Charts) declined 0.2 percent at the start of the session.
On Tuesday, the Dow Jones industrial average finished in record territory for the fourth straight session, after climbing above the 14,000 mark for the first time ever.
But investors were jittery Wednesday following some disappointing earnings from the tech sector and ahead of comments from Federal Reserve Chairman Ben Bernanke.
Internet search firm Yahoo (down $1.37 to $26.16, Charts, Fortune 500) posted results in-line with Wall Street expectations after the market close Tuesday, but the company lowered its 2007 sales outlook.
Intel (down $1.36 to $24.97, Charts, Fortune 500) also reported earnings that met analysts' consensus estimates, but the chipmaker's gross margin - a key measure of profitability - disappointed investors.
Renewed concerns about the extent of the fallout from problems in the subprime mortgage sector also pressured sentiment. Two Bear Stearns (down $2.91 to $137.00, Charts, Fortune 500) hedge funds heavily invested in securities backed by subprime mortgages are nearly worthless, according to a report in the Wall Street Journal.
On the economic front, prices paid by consumers rose slightly more than expected in June, but so-called core CPI, which strips out food and energy prices, fell in line with Wall Street expectations.
Housing starts climbed in June, but applications for new projects, a key measure of builder confidence, fell more than expected, the Census Bureau reported Wednesday.
The economic reports come as Bernanke begins his two-day testimony before Congress later Wednesday. Investors will scrutinize his comments for clues about the future course of interest rates.
On the earnings front, JPMorgan Chase (down $1.06 to $48.86, Charts, Fortune 500) reported a better-than-expected increase in quarterly results before the bell Wednesday, driven by strong investment banking results.
Drugmaker Pfizer (down $0.76 to $25.20, Charts, Fortune 500), meanwhile, posted a decline in quarterly profit as competition from generics and a decline in sales of its cholesterol drug Lipitor hurt its bottom line.
In corporate news, the board of Dow Jones (down $0.06 to $56.39, Charts) backed the $5 billion takeover offer from Rupert Murdoch's News Corp (up $0.04 to $24.29, Charts, Fortune 500). Approval from the controlling Bancroft family is still needed for the deal to go ahead.
Oil prices gained. U.S. light crude for August delivery added 53 cents to $74.55 a barrel in electronic trading.
Treasury prices rose, lowering the yield on the benchmark 10-year note to 5.05 percent from 5.07 percent late Tuesday. Bond prices and yields move in opposite directions.
The dollar rose slightly against the euro and weakened against the yen.