Stocks slump, gold surges

sandp2.pngClick chart for more market data. By Hibah Yousuf, staff reporter


NEW YORK(CNNMoney.com) -- Stocks slumped Wednesday, with the Dow ending a 5-day winning streak, as gold prices hit new highs and investors remained on edge about the recovery.

The Dow Jones industrial average (INDU) finished 22 points lower, or 0.2%, and the S&P 500 (SPX) lost 6 points, or 0.5%.

The Nasdaq (COMP) declined 15 points, or 0.6%, as the tech-heavy index was dragged down by Adobe's (ADBE) 20% plunge. Investors were disappointed after the software developer said that sales and earnings for its next quarter might fall short of expectations.

Stocks have already logged significant gains in September and are still on track to post the biggest monthly gains since April 2009. So far this month, the S&P 500 is up more than 8%.

"Sentiment has really changed this month," said Ron Kiddoo, CIO at Cozad Asset Management. "Investors are thinking maybe things aren't quite as bad, and the economy isn't headed for a double-dip."

Because of the nice run over the past few weeks, Kiddoo expects stocks to trade in a narrow range through the end of the month.

"There's no major catalyst to move the market due until the monthly jobs report in early October, and then earnings season," he said.

Stocks rallied Tuesday after the Fed said it would take any action necessary to support the recovery, but gains were short-lived as investors considered the Fed's downbeat economic outlook.

While the Fed said it expects improvement ahead, the central bank also cautioned that "the pace of economic recovery is likely to be modest in the near-term."

The uncertainty drove investors toward gold, with the precious metal surging to a new record.

Traders are also closely watching the Fed's securities purchases for any indication of how Tuesday's statement about the possibility of more quantitative easing (buying long-term U.S. Treasurys to boost the economy) translates into real action.

The yields on the 2-year and 5-year notes eased toward new lows, signaling some strong buying as prices and yields move in opposite direction.

Companies: Microsoft (MSFT, Fortune 500) said late Tuesday that it was hiking its quarterly dividend by 23% to 16 cents a share. Shares of Microsoft fell 2.2%.

Shares of Adobe Systems (ADBE) got slammed after the company issued a sales and earnings outlook that fell far short of analysts estimates. After the closing bell Tuesday, Adobe reported a solid quarterly profit but the disappointing guidance sent the stock tumbling. Shares closed down 19%.

World markets: Stocks in Europe closed lower. Britain's FTSE 100 edged down 0.4% while the CAC 40 in France sank 1.3% and Germany's DAX declined about 1.1%.

Asian shares ended the session mixed. The Nikkei in Japan lost 0.4%, while the Hang Seng in Hong Kong and Shanghai Composite closed the session with modest gains.

Currencies and commodities: The dollar tumbled against the euro, the Japanese yen and the British pound.

Crude oil for November delivery, the most active contract, fell 26 cents to settle at $74.71 a barrel.

Gold futures continued their march toward $1,300 an ounce. Gold for December delivery climbed $17.80 to settle at all-time high of $1,292.10 an ounce, after posting a new intra-day record of $1,298.00 earlier.

Bonds: The price on the 10-year Treasury note was higher, pushing down the yield to 2.56% from 2.62% late Tuesday. To top of page

Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 32,627.97 -234.33 -0.71%
Nasdaq 13,215.24 99.07 0.76%
S&P 500 3,913.10 -2.36 -0.06%
Treasuries 1.73 0.00 0.12%
Data as of 6:29am ET
Company Price Change % Change
Ford Motor Co 8.29 0.05 0.61%
Advanced Micro Devic... 54.59 0.70 1.30%
Cisco Systems Inc 47.49 -2.44 -4.89%
General Electric Co 13.00 -0.16 -1.22%
Kraft Heinz Co 27.84 -2.20 -7.32%
Data as of 2:44pm ET

Sections

Bankrupt toy retailer tells bankruptcy court it is looking at possibly reviving the Toys 'R' Us and Babies 'R' Us brands. More

Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.