By Caroline Valetkevitch
NEW YORK (Reuters) -U.S. stocks were lower in choppy trading on Wednesday afternoon, rising early with technology shares and then falling in tandem with them as investor jitters were stoked by weak demand in a 10-year Treasury auction.
With investors still nervous after a recent steep selloff in global stocks, equities pared early gains further after the Treasury auction. Wall Street then turned red, and the S&P technology index was last down 0.7%.
“There’s just a lot to worry about over the next eight weeks or so, so I’m expecting more voatlilty. I wouldn’t be surprised if after a few days of rally you have another small selloff,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
Investors have been worried about a possible U.S. recession and weaker-than-expected forecasts from U.S. companies.
The Dow Jones Industrial Average fell 189.15 points, or 0.49%, to 38,808.51, the S&P 500 lost 23.36 points, or 0.45%, to 5,216.67 and the Nasdaq Composite dropped 108.22 points, or 0.66%, to 16,258.63.
“The yield curve and its constant inversion has people on edge and the market has generally been priced for perfection anyway,” said Peter Andersen, founder of Andersen Capital Management in Boston.
“When you see any kind of perturbation in the yields on the curve, that causes some pause for investors, especially when there’s an auction happening which very sensitive to the current state of the market.”
Stocks got early support when Bank of Japan (BOJ) Deputy Governor Shinichi Uchida said the central bank would not raise rates when financial markets are unstable, pushing the yen lower and boosting market sentiment.
The BOJ’s surprise rate hike on July 31 to a level unseen in 15 years had sparked a global stocks rout as investors unwound their sharp yen carry trade positions following a surge in the low-yielding currency, widely used for acquiring high-yielding assets.
Walt Disney fell 3.3% as it predicted a “moderation in demand” at its theme park business in the coming quarters.
Super Micro Computer lost 20% after it reported quarterly adjusted gross margins below estimates. Rival Dell Technologies dropped 4.9%.
Markets await more commentary on monetary policy from U.S. central bank officials next week, in the run-up to the Jackson Hole, Wyoming, event where Fed Chair Jerome Powell is scheduled to speak.
Declining issues outnumbered advancing ones on the NYSE by a 1.14-to-1 ratio; on Nasdaq, a 1.67-to-1 ratio favored decliners.
The S&P 500 posted 16 new 52-week highs and 6 new lows; the Nasdaq Composite recorded 32 new highs and 157 new lows.
(Additional reporting by Shubham Batra and Shashwat Chauhan in Bengaluru; Editing by Sriraj Kalluvila, Shinjini Ganguli and David Gregorio)