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Tumbling shares of technology behemoth IBM knocked the Dow deep into the red, offsetting some of the big gains seen on Tuesday.
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The Dow Jones Industrial Average fell 82.8 points, or 0.63%, to 13033, the S&P 500 dipped 5.6 points, or 0.41%, to 1385 and the Nasdaq Composite dropped 11.4 points, or 0.37%, to 3031.
The S&P 500 soared 1.6% in a broad-based rally on Tuesday as traders cheered generally upbeat first-quarter earnings from several big companies and brushed aside worries about the eurozone debt crisis. The mood across American and European trading desks was decidedly dimmer on Wednesday.
Dow component IBM (NYSE:IBM) dropped more than 3% after missing revenue expectations in its first quarter. It was the steepest loss since October 18 for "Big Blue," according to data compiled by FOX Business.
The technology stock trimmed 56 points from the Dow's overall performance. Fellow blue chip Intel (NASDAQ:INTC) fell as well after offering relatively weak gross margin forecast for the second quarter as well.
Halliburton (NYSE:HAL), the world's second-biggest oilfield servicing company, said its profits and revenue climbed on a year-to-year basis in the first quarter, coming in ahead of analysts' expectations. Yahoo (NASDAQ:YHOO) posted earnings that beat expectations as well.
American Express (NYSE:AXP) and EBay (NASDAQ:EBAY) are both set to post results after the close of trading on Wednesday.
Hawkish Commentary from World Central Banks
Minutes from the Bank of England showed that only one individual on the central bank's policy-setting board pushed for additional quantitative easing to help sooth financial markets and boost the Great Britain's economy. Traders were expecting more support for additional easing, according to analysts at Nomura.
The Riksbank, which is Sweden's central bank, also held interest rates steady. Some analysts there were anticipating a rate cut, but it was "a very close call," Barclays Capital said in a research note. Barclays also noted that the Riksbank's commentary was also generally more upbeat than was expected.
Overall, market participants are beginning to question whether global central banks are going to reduce stimulus plans as the economy starts to recover and inflationary headwinds tick higher. They also remained cautious about the debt situation in Spain, with a long-term debt sale just looming just a day away. Indeed, Germany paid a record low interest rate on its two-year notes at an auction on Wednesday as traders shifted into the safe-haven asset, according to data from the Wall Street Journal.
European blue chips slid 1.7%, while the greenback climbed 0.43% as tracked by the dollar index.
Commodities were mostly in the red. The weekly inventory report from the Energy Department showed oil stocks jumping 3.9 million barrels last week, more than the 1.4 million analysts expected. The increase over the past four weeks has been the biggest since 2009, according to Reuters.
Gasoline stocks, however, dropped 3.7 million barrels, considerably bigger than the 900,000-barrel draw that was forecast.
Crude oil traded in New York fell $1.53, or 1.5%, to $102.67 a barrel. Wholesale New York Harbor gasoline slid 3 cents, or 1%, to $3.203 a gallon.
In metals, gold slumped $11.50, or 0.7%, to $1,640 a troy ounce. The yield on the 10-year U.S. Treasury fell 0.025-percentage point to 1.984%.
European blue chips slid 1.7%, the English FTSE 100 dropped 0.38% to 5745 and the German DAX dipped 1% to 6732.
In Asia, the Japanese Nikkei 225 rallied 2.1% to 9667 and the Chinese Hang Seng rose 1.1% to 20781.