By Alexandra Scaggs
U.S. stocks were mixed Wednesday afternoon, while technology
stocks lagged broader benchmarks.
The Dow Jones Industrial Average edged up 35 points, or 0.2%, to
17102. The S&P 500 index was little changed, gaining less than
0.1% to 2003, and the Nasdaq Composite Index dropped 18 points, or
0.4%, to 4580.
Shares initially rose on the heels of gains in Europe and Asia,
but pared those gains midday as tech stocks weighed on U.S.
benchmarks. The tech sector of the S&P 500 fell 0.5%.
Apple slid 3.4%, one week before it is expected to unveil its
latest iPhone and on a day when competitor Samsung launched a new
product. One Wall Street analyst warned that he might downgrade
Apple's stock unless next week's event includes "massive"
opportunities for profit.
"Investors really want to play it safe coming into something
like that," said Jonathan Corpina, senior managing partner at
Meridian Equity Partners. "Then the rest of the sector gets pulled
down, too."
European markets rallied as Russian President Vladimir Putin
confirmed that he and Ukrainian President Petro Poroshenko had
agreed to the outlines of a cease-fire between Ukrainian forces and
pro-Russian rebels fighting in eastern Ukraine. The Stoxx Europe
600 Index gained 0.6%. Germany's DAX Index rose 1.3%.
The Ukraine conflict "definitely has been a drag on the European
economy, and Europe is a big part of the global economy," said Paul
Zemsky, chief investment officer at Voya Investment Management. "If
that gets cleared up the market can go higher."
Investors like Mr. Zemsky are now looking ahead to Thursday's
statement from the European Central Bank.
"It's a big, big meeting," he said. Recent statements from ECB
President Mario Draghi have boosted investor hopes that the central
bank would take steps to stimulate the region's economy, he said,
so "if he doesn't come up with something, people will just throw up
their hands and dismiss Europe as an asset class for a while."
His fund has been making incremental additions to its holdings
of European stocks, as a bet that the conflict in Ukraine won't
cause lasting damage to the region's economy. But he remains
downbeat on the prospect of gains in the region, particularly
compared with the U.S.
The S&P 500 has completely recovered from its mid-July
swoon, caused in part by a flare-up in conflicts in the Middle East
and Ukraine. The Dow isn't far behind, off 0.4% through Tuesday
from its July 16 record close.
Many investors say improving economic data and low yields on
U.S. Treasurys should continue to boost the appeal of stocks.
"When you get rid of this day-to-day noise, you're looking at a
pretty decent outlook for global growth," said Geoffrey Pazzanese,
who manages $600 million in international stocks for Federated
Investors.
He still expects growth in the U.S. to be stronger than other
economies, so his fund has been buying shares of companies that
export products, such as German car makers.
A report on factory orders in July showed a 10.5% increase,
nearly in line with the 11% increase expected by economists
surveyed by The Wall Street Journal.
Asian stocks finished mostly higher, boosted by positive Chinese
data. The HSBC China services purchasing managers index for August
rose to a 17-month high.
U.S. Treasury prices changed course midday to push higher, with
the yield on the benchmark 10-year note edging down to 2.413%,
according to FactSet.
In other corporate news, Netflix has reached an agreement with
Time Warner's Warner Bros. to secure streaming rights for the TV
show "Gotham, " marking the latest major content acquisition by
Netflix, The Wall Street Journal reported. Netflix shares rose 0.7%
and shares of Time Warner were up 0.7%.
Delta Air Lines fell 5.5% after it reported that passenger
revenue per seat was at the lower end of its forecasts and cut its
projections for its third-quarter operating margin. The airline has
rallied 42% so far this year.
In commodity markets, crude-oil futures rose 2.3% to $95.04 a
barrel. Gold futures gained 0.4% to $1,270.60 an ounce.
Write to Alexandra Scaggs at alexandra.scaggs@wsj.com