US stocks fell as worries about the global economy flared anew late in the session, overcoming an earlier rally that had been powered by encouraging US economic data. Microsoft, McDonald's and American Express were among the decliners.
The Dow Jones Industrial Average dropped 69.30 points (0.69%) to 9,974.45, marking its first close below 10,000 since Feb. 8. Microsoft was the measure's worst performer, off $1.06 (4.1%) to $25.01, leading it to be overtaken in market value by long-time rival Apple. McDonald's was also weak with a decline of $1.83 (2.7%) to $66.01, while American Express slid 83 cents (2.1%) to $38.17.
Walt Disney led the Dow's handful of gainers with a jump of 75 cents (2.3%) to $33.07. A criminal case attracted the attention of investors. An administrative assistant to Disney's head of communications and her boyfriend were arrested and charged with trying to sell advance information on Disney's earnings. Among the accusations was that the two allegedly shared information that Disney was in serious talks to sell its ABC broadcast network. Disney's shares rose on the prospect of the talks, although Disney said the purported conversations about selling ABC "were and are false."
The Nasdaq Composite slipped 15.07 (0.68%) to 2,195.88. Among the measure's components, investors kept a close eye on the action in Apple and Microsoft, which have some of the heaviest weightings on the Nasdaq. With Microsoft's 2.7% drop and Apple not down as much - it closed down $1.11 (0.5%) to $244.11 - Apple's market capitalisation surpassed that of Microsoft. Apple closed with a market cap above $222bn, while Microsoft ended the session under $220bn. Only Exxon Mobil is bigger among US companies.
The Standard & Poor's 500 declined 6.08 (0.57%) to 1,067.95. The industrials sector was the only category that managed to eke out a small gain, boosted by a bigger-than-expected increase in US durable-goods orders.
The durable-goods data, along with a better-than-expected report on new-home sales and boosted economic growth estimates from the Organization for Economic Cooperation and Development, helped to lift the broader stock market earlier in the session. But the gains faded by the end of the session in what traders attributed to continuing worries about Europe's fragile economy.
Union Pacific rose $1.88 (2.8%) to $70.12, after the transportation company's chief financial officer said the ongoing overseas economic turmoil doesn't appear to be crimping a recent upturn in US freight volume.
Toll Brothers edged up 17 cents (0.8%) to $20.78. The home-building company's fiscal second-quarter loss narrowed, leading Toll to say a recovery in the housing market is under way.
Citigroup climbed 8 cents (2.1%) to $3.86. A broker upgraded its investment rating on the stock to outperform from neutral, citing valuation.
American Eagle Outfitters tumbled $2.56 (17%) to $12.82. The teen retailer's fiscal first-quarter earnings plunged by half on losses from its failed MARTIN+OSA chain, masking higher sales. In addition, the retailer forecast current-quarter earnings well below Street estimates.
Vertex Pharmaceuticals rose 79 cents (2.3%) to $34.74. The company said a late-stage trial of its hepatitis-C treatment, Telaprevir, found three-quarters of patients had a "viral cure" with a 12-week stint of the drug. An investigator on the trial said the results represent a potential new era of therapy for chronic hepatitis C.
Advanced Micro Devices edged up 7 cents (0.9%) to $8.22. The chip company's chief executive said it will be selling its new Fusion line of chips by the end of this year, and computers using the new product should hit store shelves early next year. Fusion is AMD's attempt at combining traditional computer processors with graphics processing on a single chip.
For Australian ADRs listed on the NYSE, BHP Billiton added 55 cents (0.89%) to US$62.17, Rio Tinto Plc strengthened 47 cents (1.1%) to US$43.33, ResMed weakened 87 cents (1.4%) to US$61.14, Telstra Corporation improved 15 cents (1.26%) to US$12.10, Telecom Corporation of NZ climbed 4 cents (0.63%) to US$6.39 and Westpac dropped $2.29 (2.48%) to US$90.01.
At 7:45 AM (AEST), the 10-year Treasury note yield was 3.19% and the five year yield was 2.02%.
European shares rebounded on Wednesday, with investors picking up shares in companies bruised by heavy selling in the previous session on fluctuating sentiment toward prospects for economic growth.
After a 2.5% downturn on Tuesday, the Stoxx Europe 600 index rose 2.5% to 237.95, with markets volatile amid worries that sovereign debt issues will curtail growth and spur a rerun of the 2008 banking crisis.
Banks were slammed on Tuesday, but took back some ground on Wednesday, with Swiss lender UBS shares up 1.9%, French bank Credit Agricole up 2.8% and Italy's UniCredit up 3.7%.
Giving nervous investors some reason for optimism, the Organization for Economic Cooperation and Development said economic growth across the world's developed economies is picking up faster than expected, even in Europe, although it did highlight that sovereign debt poses a risk to recovery.
Of the major regional benchmarks, the French CAC-40 index climbed 2.3% to 3,408.59, the UK FTSE 100 index moved back over 5,000 to close up 2% at 5,038.08 while the German DAX index jumped 1.6% to 5,758.02.
Shares of BHP Billiton rose 5.3%, Xstrata shares gained 5.7% and Rio Tinto shares climbed 7.3%.
In the oil sector, Repsol shares rose 1.9% and Total shares gained 1.5%. BP shares climbed 1.4%, reversing early losses. The oil giant is attempting a "top-kill" procedure to stem the Gulf of Mexico oil spill. BP said the procedure may take up to two days and warned that the live video feed that Congress forced the company to set up may "not provide a reliable indicator of the overall progress, of success or failure, of the top kill operation as a whole."
Burberry shares jumped 7.6%. The luxury retailer swung to a fiscal-year net profit of GBP81.4m pounds, as exceptional charges fell sharply and sales of shoes and non-apparel accessories climbed.
Asian markets ended higher after a late-session recovery on Wall Street helped whet appetite for stocks, with shipping and resource companies leading the charge on upbeat freight rates and a rebound in commodity prices.
Japan's Nikkei Stock Average climbed 0.7%, China's Shanghai Composite Index inched up 0.1%, while Hong Kong's Hang Seng Index gained 1.1%.
New Zealand shares ended higher, benefiting from a strong bounce in the Australian market and bargain hunting in battered heavyweights such as Telecom and Fletcher Building. The NZX-50 Index ended up 0.3%, or 7.36 points higher, at 3,011.19, after closing at its lowest level in 10 months on Tuesday.
Base metals on the LME finished up. Aluminium rose $10 (0.50%) to $2,025 while copper firmed $65 (0.96%) to $6,830 and nickel added $125 (0.59%) to $21,325. Zinc strengthened $30 (1.60%) to $1,900 and lead gained $20 (1.14%) to $1,770. Comex copper was last quoted at 305.00 US cents per pound.
Benchmark gold futures closed above $1,200 an ounce for the first time in a week as investors sought more metal as a safe haven from ongoing worries about European sovereign debt. Spot gold was last quoted at $1,210.95. Comex gold futures improved $15.40 (1.29%) to $1,213.40. Spot silver was last quoted at $18.01.
Crude shot up 6% as investors adopted a more optimistic outlook on the world economic recovery. Oil prices were also boosted by signs that record oil inventories at Cushing, Okla. may be on the decline. West Texas Intermediate was last quoted at US$71.51 per barrel.
At 07:45 a.m. (AET) the US dollar was quoted at 0.8227 euros, 89.87 yen, 1.218 AUD and 69.59 pence.