MARKET SNAPSHOT: Dow Rally Fades As Jackson Hole Comes Into Focus

By Sara Sjolin and Anora Mahmudova, MarketWatch Features Dow Jones Newswires

Lowe's shares slump after earnings miss

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U.S. stocks were trading lower in early action on Wednesday, with the main indexes undoing some of the solid gains from the previous session as investors turned their attention to the Jackson Hole, Wyo., meeting of global central bankers.

The Dow Jones Industrial Average was down 69 points, or 0.3%, to 21,829. On Tuesday the blue-chip index rallied almost 200 points for its biggest gain since April 25 (http://www.marketwatch.com/story/dow-sp-set-for-2nd-day-of-gains-as-rebound-continues-2017-08-22), after reports President Donald Trump is making progress in shaping a plan for tax reform.

The S&P 500 index fell 7 points, or 0.3%, to 2,444, with nearly all of its 11 main indexes trading lower. Consumer-discretionary and industrial shares were leading the losses, down bout 0.6% each.

The technology-laden Nasdaq Composite Index declined 15 points, or 0.2%, to 6,276.

Wednesday's modest bout of selling could be partly due to controversial comments from President Trump, who late Tuesday said that he's ready to shut down the government to win funding for a border wall with Mexico (http://www.marketwatch.com/story/trump-threatens-shutdown-over-border-wall-funding-predicts-end-of-nafta-2017-08-22).

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Trump, during a rally with his supporters in Phoenix, also warned of the possible termination of the North American Free Trade Agreement.

Some analysts suggested that investors are more concerned about interest rates than political turmoil emanating from Washington.

"Markets have been inured to the dysfunction in the administration. But people are waking up to the fact that interest rates, used as discount rates to calculate future cash flows, are rising. It is just math that with higher discount rates multiples would have to come down," said Kim Forrest, senior analyst and portfolio manager at Fort Pitt Capital Group.

Forward multiple or price-to-earnings ratio, a measure of equity values, of the S&P 500 are at 17.4 times, representing the highest level in more than a decade, according to FactSet.

Jackson Hole: The impending Kansas City Federal Reserve Bank's central-bank symposium in Wyoming is now only one day away. A dearth of potential trading cues has refocused investor attention on the meeting, which starts Thursday and runs through Saturday.

"The conference comes at a critical moment for central banks, especially the ECB and Fed," said Neil Wilson, senior market analyst at ETX Capital, in a note.

Fed Chairwoman Janet Yellen and European Central Bank President Mario Draghi are among top speakers on Friday, with investors hoping to get hints on the future monetary policy path from both institutions.

"After years of accommodation, the dial is shifting, albeit glacially," Wilson said. "We're about to enter uncharted water: unwinding QE has never been done before, but it's about to be tried on markets that have this year exhibited a degree of calm that is worrisome when you consider what may be coming."

See:Here's what investors will be watching when Draghi, Yellen speak at Jackson Hole (http://www.marketwatch.com/story/heres-what-investors-will-be-watching-when-draghi-yellen-speak-at-jackson-hole-2017-08-22)

The greenback pulled back on Wednesday in anticipation of the event, with the ICE Dollar down 0.2% at 93.350.

Economic news: The purchasing managers index fell to 52.5, a two-month low in August, while services business activity index rose to 56.9, the highest level in 28 months. Separately, a reading of new homes sales fell 9.4% in July.

Looking ahead, Dallas Fed President Robert Kaplan will speak at the Permian Basin Petroleum Association Membership Luncheon in Midland, Texas at 1:05 p.m. Eastern.

See:MarketWatch's economic calender (http://www.marketwatch.com/economy-politics/calendars/economic)

Stock movers: Shares of Lowe's Cos. (LOW) lost 4.6% after the home-improvement retailer reported adjusted earnings and revenue that missed forecasts. Shares of Dow component and Lowe's rival, Home Depot Inc. (HD) was among the worst performing blue chips, down 1.2% in early trade.

U.S.-listed shares of WPP PLC (WPP.LN) plunged 11% after the advertising giant cuts its growth outlook after a drop in revenue (http://www.marketwatch.com/story/wpp-cuts-growth-view-as-client-spending-drops-2017-08-23).

Salesforce.com Inc.(CRM) rose 1.4% after the cloud-software company late Tuesday reported earnings that were better than expected (http://www.marketwatch.com/story/salesforce-beats-on-earnings-and-increases-guidance-but-stock-falls-2017-08-22).

Shares of Intuit Inc. (INTU) was 0.3% lower after the financial software provider late Tuesday reported earnings that beat forecasts (http://www.marketwatch.com/story/intuit-stock-down-after-hours-on-fourth-quarter-earnings-and-cfo-change-2017-08-22), but also said its Chief Financial Officer R. Neil Williams will step down in January.

After Wednesday's closing bell, HP Inc.(HPQ) and PVH Corp.(PVH) are slated to report.

Other markets: There was no trading in Hong Kong, with the Hang Seng Index halted as category-10 Typhoon Hato slammed into the area (http://www.marketwatch.com/story/hong-kong-stock-market-closed-as-severe-typhoon-hits-2017-08-23). Other Asian stock markets (http://www.marketwatch.com/story/asian-markets-gain-despite-jackson-hole-uncertainties-2017-08-22) closed mostly higher. European equities were mostly lower (http://www.marketwatch.com/story/european-stocks-tilt-lower-even-as-factory-activity-stays-strong-2017-08-23).

Oil prices (http://www.marketwatch.com/story/oil-prices-slide-as-confusion-over-libyan-production-reigns-2017-08-23) declined, while gold prices were higher.

(END) Dow Jones Newswires

August 23, 2017 10:04 ET (14:04 GMT)