By Chris Dieterich
U.S. stocks rebounded on Wednesday from losses suffered amid
economic growth concerns.
The Dow Jones Industrial Average added 40 points, or 0.2%, to
16760, bouncing back after dropping as many as 56 points earlier in
the session.
The S&P 500 gained two points, or 0.1%, to 1937. The Nasdaq
Composite Index was nearly flat, slipping less than 0.1% to
4385.
Sputtering German industrial data, combined with a gloomy
assessment of growth by the International Monetary Fund, has
quickly darkened the global economic outlook, particularly in
Europe, where stocks continued to sink. The Stoxx Europe 600 slid
0.9% Wednesday, while Germany's DAX dropped 1%.
"This is a growth scare," said Rick Fier, director of execution
services at Conifer Securities in New York. "It's fear about where
is there growth."
Stocks have seen big swings in recent days, halting a mostly
unhindered rise for U.S. stocks since the start of this year. The
Dow plunged nearly 273 points on Tuesday in its biggest one-day
slide since the end of July, marking its third move of at least 200
points in the past five trading days.
The Dow has fallen 3.2% from its Sept. 19 record high.
"It's definitely a selloff like we haven't had in a while," said
Dave Rovelli, senior managing director of equity trading at
Canaccord Genuity.
Investors are also fretting over potential market disruptions
stemming from Federal Reserve policy changes. The Fed is expected
to end its long-running monthly bond-buying program this month. Fed
officials will release the minutes of their September policy
meeting at 2 p.m., which investors will parse for clues about when
the central bank may raise interest rates.
Energy stocks on the S&P 500 led the market lower as prices
for crude oil continued to tumble. U.S. crude-oil futures lost 1.8%
to $87.23 a barrel, a nearly 18-month low.
The rapid decline in the yield on benchmark 10-year Treasury
notes, which edged lower to 2.342% from 2.352% late on Tuesday,
supplied further evidence that investors are seeking safety from
shrinking economic growth. Bond yields fall as prices rise. The
10-year yield rose above 2.6% in the middle of last month before
reversing lower.
Canaccord's Mr. Rovelli said that traders are also fixated on
so-called technical levels, or pivot points for major benchmarks,
that often provide signals as to whether certain markets are headed
higher or lower in the short term.
In focus for many on Wednesday was the Russell 2000 index of
small company shares. Mr. Rovelli said further declines in the
Russell 2000 could weigh on the broader market as traders add to
their protective market positions. "It's a very technical selloff,"
Mr. Rovelli said.
The Russell index dropped 0.7% on Wednesday, much larger than
the broader market, extending a 3% weekly decline.
Beyond economic readings and Fed comments, investors will chew
over corporate earnings in the weeks ahead. Aluminum producer Alcoa
will report after the closing bell, a report that marks the
unofficial start to the corporate earnings season. Alcoa fell
1.8%.
Costco Wholesale rose 2.2%, the biggest gainer on the S&P
500, after the wholesale retailer posted profit and sales for the
most recent quarter that topped expectations.
Yum Brands rose 1.4% after the fast-food company reported weak
sales in China, but strong revenues at KFC and Taco Bells outside
of China.
Monsanto added 0.3% even after the agricultural biotechnology
company reported a bigger loss in the most recent quarter than
expected.
Gold futures slipped 0.5% to $1,206.70 an ounce. The dollar rose
against the euro and yen.
In Asia, the Nikkei 225 fell 1.2%, while Hong Kong's Hang Seng
declined 0.7%.
Elsewhere, action-sports camera maker GoPro fell 2.8% after
analysts at Piper Jaffray cut the stock's rating to neutral from
overweight.
GT Advanced Technologies moved higher for the second session in
a row, surging 27%. The manufacturer swooned 90% on Monday after
filing for bankruptcy protection.
Write to Chris Dieterich at christopher.dieterich@wsj.com