Dow, S&P 500 fall after records

NEW YORK (CNNMoney.com) -- The Dow dropped about 140 points Wednesday afternoon, one session after ending at an all-time high, as investors eyed component Alcoa's earnings miss and a big setback for Boeing.

News that auto workers went on strike against Chrysler added to the session's weakness.

The Dow Jones industrial average (Charts) lost 1 percent with less than 2-1/2 hours left in the session. The broader S&P 500 (Charts) index lost 0.5 percent.

The tech-heavy Nasdaq composite (Charts) saw smaller declines, after ending the previous session at a 6-1/2 year high.

The Dow had slipped throughout the morning on Alcoa, and profit warnings in the oil sector, but it fell to its lows of the session after Boeing (Charts, Fortune 500) said that it was delaying the delivery of its first 787 Dreamliner planes by six months, due to assembly problems.

Boeing said the delay won't hit 2007 and 2008 earnings, but investors sent the stock lower anyway.

AIG (Charts, Fortune 500), Caterpillar (Charts, Fortune 500), Citigroup (Charts, Fortune 500) and Honeywell (Charts, Fortune 500) were the Dow's other big losers.

However, the day's retreat was pretty moderate considering the recent run up, said Joseph Saluzzi, co-head of equity trading at Themis Trading.

"We've had a really good run, so it's not surprising to see a bit of a selloff here," he said.

Stocks rallied Tuesday as investors breathed a sigh of relief that the minutes from the last Fed meeting supported hopes for another interest rate cut by the end of the year.

But that euphoria didn't extend to Wednesday's session, particularly after a sluggish start to the third-quarter earnings reporting period.

As is traditional, Dow component Alcoa (Charts, Fortune 500) unofficially began the reporting period when it released results late Tuesday. The aluminum maker said it earned 64 cents per share, up from 62 cents a year earlier and 2 cents short of forecasts. Revenue fell from a year ago, but met forecasts.

Alcoa shares fell 3.5 percent Wednesday and dragged on the Dow.

Lower gas prices in the quarter dragged on oil services firms, with both Valero Energy (Charts, Fortune 500) and Chevron (Charts, Fortune 500) warning that quarterly results will be hurt because the companies earned less from the refineries that fuel gas pumps.

Qwest Communications (Charts, Fortune 500) fell 3 percent in active New York Stock Exchange trading after UBS downgraded the telecom to "neutral" from "buy," Briefing.com reported.

On the upside, Costco (Charts, Fortune 500) reported higher quarterly earnings that topped estimates and said September sales at stores open for a year or more rose more than expected.

Market breadth was negative. On the New York Stock Exchange, losers beat winners five to three on volume of 660 million shares. On the Nasdaq, decliners beat advancers 9 to 5 on volume of 1.21 billion shares.

In economic news, a government report showed that August wholesale inventories rose a smaller-than-expected 0.1 percent after rising 0.2 percent in the previous month.

Treasury prices rose, lowering the yield on the benchmark 10-year note to 4.63 percent from 4.64 percent late Tuesday. Bond prices and yields move in opposite directions.

COMEX gold for December rose $2.70 to $745.80 an ounce.

U.S. light crude oil for November delivery rose 39 cents to $80.65 a barrel on the New York Mercantile Exchange.