Stocks posted notable losses on Wednesday, as the Federal Reserve's Beige Book showed some signs of a stalling economic recovery and the Commerce Department reported an unexpected drop in durable goods orders. The markets fell on the news, which continued to call into question the veracity of an economic rebound in the absence of government stimulus.
In the afternoon, the Fed released its Beige Book report, showing that the economy continued to expand over the past month but indicating that the economic recovery had trimmed its momentum.
Notably, the report revealed that the Cleveland and Kansas City Fed districts reported a standstill in economic activity, while the Atlanta and Chicago districts revealed a slowdown in the pace of growth.
While most other Fed districts indicated improvements, advances were modest at best. Overall, the report was less upbeat than June's, which detailed a moderate economic rebound.
Before the start of trading, the Commerce Department said that orders for durable goods fell by 1.0 percent in June following a revised 0.8 percent decrease in May. The decline was unexpected, as economists had forecast a 1.0 percent increase in orders for the month.
Excluding a 2.4 percent decrease in orders for transportation equipment, durable goods orders fell by a more modest 0.6 percent in June compared to a 1.2 percent increase in the previous month. Economists had expected ex-transportation orders to increase by 0.6 percent.
In earnings news, Boeing Co. (BA) reported second-quarter earnings that edged out estimates, while revenues fell well short of analyst forecasts. Sprint Nextel (S) reported a wider second-quarter net loss compared to last year on revenues that were just short of analyst expectations.
The major averages moved well off their worst levels of the day going into the close but remained stuck in the red. The Dow fell by 39.81 points or 0.4 percent to 10,497.88, the Nasdaq declined by 23.69 points or 1 percent to 2,264.56 and the S&P 500 slid by 7.71 points or 0.7 percent to 1,106.13.
Sector News
Housing stocks were among the day's weakest performers, with the Philadelphia Housing Sector Index dropping by 3 percent and pulling back further off of Monday's five-week closing high.
Electronic storage, healthcare, semiconductor and biotechnology stocks were also among the day's other heavy losers, further contributing to the losses by the major averages.
Meanwhile, some trucking stocks bucked the downtrend by the broader markets, with C.H. Robinson (CHRW) and Old Dominion (ODFL) posting substantial gains after reporting better than expected second quarter earnings.
Dow Components
Boeing was the leading percentage decliner in Dow, falling by 1.9 percent. The decline pulled the stock down further off of Monday's more than two-month closing high.
Drug maker Pfizer (PFE) also closed sharply lower, falling by 1.8 percent and pulling back off of the five-week closing high set on Tuesday.
Selling also dragged Home Depot (HD), Alcoa (AA), Bank of America (BAC) and Merck (MRK) down by more than one percent, while a 1.1 percent gain by Verizon (VZ) helped to offset some of the weakness in the blue chip index.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region ended mostly higher on Wednesday. Japan's benchmark Nikkei 225 surged up by 2.7 percent, while Hong Kong's Hang Seng Index advanced by 0.6 percent.
Meanwhile, European stocks ended largely on the downside. The U.K.'s FTSE 100 Index and the German DAX Index fell by 0.9 percent and 0.5 percent, respectively, while the French CAC 40 Index edged up by 0.1 percent.
In the bond markets, treasuries ended moderately higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, closed at 3.001 percent, posting a loss of 4.6 basis points.
Looking Ahead
Thursday, market focus is likely to be on weekly jobless claims data, which is the lone economic report of the day. On the earnings front, quarterly results from Exxon Mobil (XOM), Symantec (SYMC) and Citrix (CTXS) are likely to garner market attention along with many others.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.