Nasdaq breaks 4-day losing streak, Dow rally fades
Stocks closed mixed Wednesday as the Dow gave back early gains despite reports that economic growth rebounded sharply in the second quarter and the labor market continues to show signs of improvement.
The Nasdaq, however, was able to break its four-day losing streak.
Before the markets opened, the government reported that the economy grew at a robust 4% annual pace in the April-June period, blowing past economists' estimates of 3% growth. That was a sharp rebound from a 2.1% contraction in the first quarter. Stocks initially rallied but the gains quickly faded.
Investors got a look in the afternoon at the latest statement from the Federal Reserve meeting where policymakers cited an improving economy and labor market as it once again cut its monthly bond-buying purchases by $10 billion. Stocks bumped up slightly right after the release of the Fed statement but once again the move upward could not be sustained.
According to preliminary calculations, the Dow Jones industrial average fell 0.2% to 16,881 and the Standard & Poor's 500 index was flat at 1970.
The Nasdaq composite index was able to hold onto its gains and rose 0.5% to 4463. Twitter shares gained more than 20% after reporting strong user growth and earnings that beat Wall Street estimates.
In a second economic report, payroll processor ADP said businesses added 218,000 jobs in July, the fourth straight month of gains above 200,000. The Labor Department will release its employment report for July on Friday.
Stronger economic growth pushed the yield on the 10-year Treasury note higher to 2.56% from 2.46% Tuesday.
A strong report on the economy is always good news for the stock market over the long haul, said Darrell Cronk, Deputy Chief Investment Officer for Wells Fargo Wealth Management. In the near term, though, investors weigh any good news against an interest-rate move from the Federal Reserve. Fed officials are winding down their support for the economy and could start raising interest rates next year.
Overseas, European markets were trading lower. Britain's FTSE 100 was fell 0.5% to 6773.44 and Germany's DAX index dropped 0.6% to 9593.68.
In Asia, Japan's Tokyo 225 index rose 0.2% to 15,646.23 and Hong Kong's Hang Seng index gained 0.4% to 24,732.21.
Russian stocks posted gains despite harsher U.S. and European sanctions. The Russian MICEX index was up 1.1%.
The major U.S. indexes closed lower Tuesday as investors were torn between a batch of mostly positive earnings reports and rising global tensions.
Contributing: The Associated Press