MARKET SNAPSHOT: Stock Market Closes Lower As Optimism Fades Before Jackson Hole

Lowe's shares slump after earnings miss

U.S. stocks closed lower Wednesday on light volume, 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 and digested comments from President Donald Trump's Tuesday night rally in Phoenix.

The Dow Jones Industrial Average closed down 87.80 points, or 0.4%, at 21,812.09, with shares of Johnson & Johnson Inc.(JNJ), Walt Disney Co. (DIS) and Cisco Systems Inc. (CSCO) leading decliners.

On Tuesday the blue-chip index rallied almost 200 points for its biggest gain since April 25 (, after reports that Trump was making progress in shaping a plan for tax reform. Still, even with Tuesday's rally, the Dow has not gained 1% or more in a single day since April 25, its longest streak without a 1% or more gain since March 2007 (, according to Dow Jones data.

The S&P 500 index fell 8.47 points, or 0.4%, to 2,444.04, with eight out of its 11 main indexes finishing lower. Consumer-discretionary and industrial shares led the losses, down 0.8% and 0.9%, respectively.

The technology-laden Nasdaq Composite Index declined 19.07 points, or 0.3%, to 6,278.41.

Trading volumes were still light, with 2.76 billion shares exchanging hands on the New York Stock Exchange, and 1.51 billion shares on the Nasdaq at the close. August average daily volumes are well below the year-to-date averages. Month to date, average daily volume for the NYSE is 3.16 billion shares and 1.84 billion shares for the Nasdaq, according to Dow Jones data.

Wednesday's modest bout of selling could be partly due to controversial comments from Trump, who late Tuesday said that he's ready to shut down the government to win funding for a border wall with Mexico ( House Speaker Paul Ryan, however, played down the idea of a government shutdown ( on Wednesday.

See:Trump 'shutdown' threat rattles stock market (

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

"You've got a combination of not a lot of data before Jackson Hole and low volume with optimistic views reversing with some of the president's comments," said Bill Stone, global chief investment strategist at PNC Asset Management Group, in an interview.

"It's very difficult to forecast how political machinations are running," Stone said. "We'll still see a tax cut because the Republican Congress has to show some progress. I think it's easier to coalesce around tax cuts, but normally, optimism one day leads to disappointment the next."

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

Read:Do stock-market investors really care about Gary Cohn and the Trump agenda? (

"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 the 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 (

Earlier Wednesday, the greenback pulled back in anticipation of the event, and by the close the ICE Dollar was flat at 93.15.

Economic news: The purchasing managers index fell to 52.5, a two-month low, in August, while the 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.

See:MarketWatch's economic calender (

Stock movers: Shares of Lowe's Cos. (LOW) finished down 3.7% after the home-improvement retailer reported adjusted earnings and revenue that missed forecasts (

U.S.-listed shares of WPP PLC (WPP.LN) plunged more than 11% after the advertising giant cuts its growth outlook after a drop in revenue ( Similarly, shares of rivals Omnicom Group Inc.(OMC) fell 7% and Interpublic Group of Cos.(IPG) dropped 6.3%.

Coty Inc.(COTY) shares fell further Wednesday, down 5.5%, after the beauty products company reported weak results on Tuesday (

Foot Locker Inc.(FL) shares rose 6.2%, moving higher for the week following a series of downgrades from poor earnings and a big selloff on Friday ( Inc.(CRM) rose 0.1% after the cloud-software company late Tuesday reported earnings that were better than expected (

Shares of Intuit Inc. (INTU) fell 1.9% after the financial software provider late Tuesday reported earnings that beat forecasts (, but also said its Chief Financial Officer R. Neil Williams will step down in January.

Other markets: There was no trading in Hong Kong, with the Hang Seng Index halted as category-10 Typhoon Hato slammed into the area ( Other Asian stock markets ( closed mostly higher. European equities finished lower (

Oil prices ( rose 1.2% to settle at $48.41 a barrel after data showing a decline in U.S. crude supplies, while gold ( advanced 0.3% to settle at $1,294.70 an ounce.

--Sara Sjolin in London contributed to this report.

(END) Dow Jones Newswires

August 23, 2017 16:30 ET (20:30 GMT)