10-23-13 4:42 PM EDT | Email Article

By Kate Gibson and Wallace Witkowski, MarketWatch


SAN FRANCISCO (MarketWatch) -- U.S. stocks closed lower on Wednesday, with the S&P 500 falling from a record, as investors assessed mixed results from U.S. corporations, including a disappointment from equipment-maker Caterpillar Inc.


The Dow Jones Industrial Average (DJI) declined 54.33 points, or 0.4%, to close at 15,413.33, with 21 of its 30 components in negative terrain.


Caterpillar (CAT) paced blue-chip losses, off 6.1% after the heavy equipment lowered its earnings outlook. Boeing Co. (BA) shares led gains on the Dow, closing up 5.3%, after the plane manufacturer raised its 2013 forecast.


"Earnings are about what you might expect in a slow-growth economy; some areas are doing well, and some are not doing well at all," said Bruce Bittles, chief investment strategist at RW Baird & Co.


"We're at that point where the infamous 'Wall of Worry' becomes significant. Margins have peaked, so we have to live off revenue growth more than earlier in the cycle," said Bruce McCain, chief investment strategist at Key Private Bank.


The S&P 500 index (SPX) fell 8.29 points, or 0.5%, to close at 1,746.38, with energy the worst performing and consumer staples faring the best of the 10 major industry sectors. The S&P 500 closed at a new all-time high of 1,754.67 on Tuesday.


The midweek swoon "feels like a normal pullback," said Bittles, who notes that Wall Street has "rallied almost 100 S&P points since two weeks ago."


Broadcom Corp. (BRCM) fell 2.9% after the wireless-device chip maker projected fourth-quarter revenue below estimates and said it would cut up to 1,150 jobs.


The Nasdaq Composite Index (RIXF) fell 22.49 points, or 0.6%, to close at 3,907.07.


Declining stocks outnumbered advancers slightly on the New York Stock Exchange, where more than 708 million shares traded by the close. Composite volume surpassed 3.6 billion. Decliners outnumbered gainers by nearly two to one on the Nasdaq, where more than 463 million shares traded by the close. Composite volume for Nasdaq-listed stocks topped 1.9 billion shares.


Investor sentiment was also hit by worries about possible monetary constrictions in China and softness among European banks.


"There is continuing worry that they are extending bad loans and building things that aren't needed," said McCain of a Bloomberg News report that China's largest banks had tripled the number of bad loans written off in the first half of the year to clear up their books before another round of defaults.


"A movement to tighten monetary conditions to slow growth in China is a modest threat to global economic growth that could spill over not only to the European stock market, but to U.S. stocks given the importance of China as a U.S. export market," Fred Dickson, chief investment officer at Davidson Companies, noted in emailed commentary.


The dollar (DXY) gained against global currencies such as the euro (EURUSD) but not the yen (USDJPY). A day after its strongest rise in a month, the 10-year Treasury yield (10_YEAR) fell nearly 2 basis points to 2.50%. See: Dollar, yen get safety bid.


"Yields are coming down pretty quickly here, which suggests the rate of inflation is going to be soft going forward, and the economy with it," said Bittles, who adds falling commodity prices also reflect a slowing economy.


But the scenario holds potential positives, given "the housing market had been threatened when yields went to 3% on the 10-year, and lower energy prices means lower gasoline prices, which means a tax cut for the consumer," Bittles added.


On the New York Mercantile Exchange, gold futures (GCZ3) lost $8.60, or 0.6%, to settle at $1,334 an ounce, and the cost of a barrel of oil (CLZ3) declined $1.44, or 1.5%, to settle at $96.86.( Read more on oil: http://www.marketwatch.com/story/oil-futures-drop-as-api-data-show-rise-in-supply-2013-10-23.)

-Kate Gibson; 415-439-6400; AskNewswires@dowjones.com


Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

10-23-13 1642ET

Copyright (c) 2013 Dow Jones & Company, Inc.
Copyright 2014 MarketWatch
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