Closing Bell: Stocks Fall on Fed Uncertainty, Macy's Earnings

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U.S. stocks fell Wednesday as investors further speculated on when the Federal Reserve might curb its stimulus measures and after department store Macy's stock fell from a "tough" sales environment.

The Dow Jones industrial average (^DJI) fell 113 points, or 0.7 percent, to 15,337, the Standard & Poor's 500 index (^GPSC) dropped 8 points to 1,685 and the Nasdaq composite index (^IXIC) lost 15 points, 0.5 percent, to close at 3,669.

Trading volume has been low as earnings season winds down and economic indicators present a mixed view of growth, complicating predictions of the Fed's next policy action. The Fed has been buying $85 billion in bonds on each month to hold interest rates lower. Some expect the Fed to taper bond purchases as early as September if data shows the economy is improving.

Macy's, which operates its namesake stores and Bloomingdales, dropped $2.16, or 4.5 percent, to $46.34 after its profit fell short of analyst estimates. Macy's blamed shoppers' reluctance to spend for a slip in sales. During the past year, Macy's (M) stock is up almost 27 percent.

Apple rose above $500 for the first time since January, then dipped back below that plateau again, to close at $498.44, up 1.8 percent.
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The company's stock jumped 4.8 percent Tuesday after activist investor Carl Icahn said he thinks Apple (AAPL) should be doing more to revive its stock price. Icahn also said he had a large, but unspecified stake, in the company.

Homebuilding stocks have been falling over concern about sharply higher mortgage rates, which could cool demand for homes and squelch a recovery in the housing market. PulteGroup (PHM) lost ground for a seventh day out of the past eight, declining 1.8 percent to $15.10, while Lennar (LEN) fell 1.5 percent to $31.70 and D.R. Horton (DHI) lost 2.5 percent to $18.09.

Other Stocks in the News:
  • Live Nation Entertainment (LYV) fell 4.8 percent to $17.33 after CEO Michael Rapino sold off part of his stake in the concert promotion and ticket selling company. The sold-off shares, detailed in a regulatory filing Tuesday, make up 38 percent of the 1.7 million shares he owned.
  • SeaWorld Entertainment (SEAS), which made its stock market debut in April, fell 3.7 percent to $34.98 after the company reported a loss for the second quarter as foul weather and higher ticket prices kept crowds away.
  • Steinway Musical Instruments (LVB) jumped 7.9 percent to $41.29 after agreeing to be purchased for $499 million by the investment firm Paulson & Co.
  • Shares of Brocade Communications Systems (BRCD) climbed to a multiyear high after its posted third-quarter results that topped Wall Street expectations. Shares ended the day up 15.8 percent to $7.99
  • Deere (DE) shares fell 1.9 percent to $82.34 the company said that fourth-quarter equipment sales would fall 5 percent compared with a year earlier. For the third quarter the farm and construction equipment manufacturer reported it earned $997 million, or $2.56 a share, well ahead of the $2.17 a share that Wall Street was looking for.
  • Microsoft (MSFT) said customers waiting for the revamped version of its latest Windows operating system will be able to get the software beginning Oct. 17. The release date for Windows 8.1 is nearly a year after the debut of Windows 8.
What to Watch Thursday:
  • At 8:30 a.m. Eastern time the Labor Department releases weekly jobless claims and data on July consumer prices.
  • The Federal Reserve releases industrial production for July at 9:15 a.m.
  • At 10 a.m. Freddie Mac releases weekly mortgage rates and the National Association of Home Builders releases housing market index for August.
These major companies are scheduled to report corporate quarterly earnings:
  • Cosi (COSI)
  • Estee Lauder (EL)
  • Kohl's (KSS)
  • Nordstrom (JWN)
  • Walmart Stores (WMT)
-Compiled from staff and wire reports.

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