Stock Rally Fizzles After Dow's Best Day Since April

By Riva Gold Features Dow Jones Newswires

Dow opens lower after best day since April

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-- Mexican peso under pressure after President Trump's comments

-- Lowe's shares drop after earnings

A rally in global stocks stalled Wednesday after the Dow Jones Industrial Average's biggest daily advance since April.

The blue chip index fell 73 points, or 0.3%, to 21826.38 shortly after the opening bell. The S&P 500 declined 0.4% and the Nasdaq Composite lost 0.3% following the tech-heavy index's best session in more than a month.

Lowe's was among the worst performers in the S&P 500 after the home-improvement retailer reported earnings that fell below analyst expectations and lowered its outlook for the year.

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Some analysts attributed the caution in markets to comments from President Donald Trump late Tuesday threatening to shut down the government to secure funding for a wall on the southwest border.

"It seems inconceivable that the debt ceiling won't be moved as it has been umpteen times, but the nearer the deadline comes, it will make people nervous," said Russ Mould, investment director at AJ Bell.

The Mexican peso, among the year's best-performing currencies, dropped 0.6% against the dollar after the comments on trade and a border wall, while gold climbed 0.2% as assets seen as safer stores of value found favor.

Government bonds rose, with the yield on the 10-year U.S. Treasury note falling to 2.187%, according to Tradeweb, from 2.215% Tuesday. Yields fall as prices rise.

Still, many investors noted that recent jitters have come in thin summer trading and U.S. stocks remain close to record highs. The Dow jumped nearly 200 points on Tuesday as shares rebounded from a recent pullback.

"With valuations elevated here, the market is going to be more vulnerable to short-term negative news and negative shocks," said Katie Nixon, chief investment officer at Northern Trust Wealth Management.

"But unless something really impacts the economy, it's unlikely that the market impact will be long-lasting," she said, given the current state of growth and corporate earnings.

Elsewhere, the Stoxx Europe 600 edged down 0.5% following its best session in over a week. The media sector led declines as shares of WPP, the world's largest advertising company, fell 10% after it lowered its forecast for the full year, reflecting a wider slowdown in industries such as consumer goods and retail.

Analysts also pointed to nervousness ahead of a central banking symposium in Jackson Hole, Wyo., beginning Thursday, where investors are eyeing any clues about monetary policy in the U.S. and eurozone. Purchasing managers' surveys released Wednesday showed the eurozone economy maintained its solid growth momentum in August.

The euro was last up 0.5% against the British pound, around its highest level since 2009.

"The most interesting questions come from the ECB right now given the economies there have generally done better than expected," said Mr. Mould.

Earlier, Asian shares erased early gains to close little changed. Japan's Nikkei Stock Average rose as much as 0.9% from a four-month closing low but pared gains to 0.3% as the yen rose against the dollar.

The Shanghai Composite Index declined 0.1%, ending a four-day rally, with steel and precious-metals stocks the biggest decliners. Trading in Hong Kong was halted as Typhoon Hato passed by the city.

--Ese Erheriene and Amrith Ramkumar contributed to this article.

Write to Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

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