After being lower most of the session, the Dow Jones industrial average ended higher by 6.27 points, or 0.06%, to 10,126.51. The broader Standard & Poor's 500 index fell 1.06 points, or 0.1%, to 1,098.63. The tech-heavy Nasdaq composite slipped 4.36 points, or 0.23%, to 1,855.06.
After reaching fresh 21-year highs overnight of more than $44 per barrel, oil prices plunged in late trading on higher inventory data and reports that OPEC could raise output. On NYMEX, crude futures ended near session lows, dropping $1.35 to settle at $42.80 per barrel. Prices had reached the $44 mark late in Tuesday's session after comments by OPEC President Purnomo Yusgiantoro, who said the cartel had no additional supplies immediately available. On Monday, Algerian Oil Minister Chakib Khelil said OPEC had done all it could to stem rising oil prices.
Investors are nervous that continued high oil prices will stall recovering world economies. Shares in airlines were under pressure. Energy and retail companies were also lower.
In earnings news, investors got a mixed bag. Insurer Cigna (CI
) posted a second-quarter profit on higher earnings in its health-care, disability and life and international businesses. The company also raised its 2004 profit outlook.
Drugstore chain CVS (CVS
) said earnings rose 17.4% in the second quarter on higher prescription drug sales. Net income in the second quarter rose to $234.5 million, or 56 cents per share, up from $196.1 million, or 49 cents a share, last year.
Among Internet stocks, online media giant InterActiveCorp (IACI
), owner of Expedia.com and Hotels.com, fell 16% after the company reported a 25% drop in second-quarter income and lowered ts 2004 forecast to the bottom of its previous range.
Another leading Internet name, Yahoo! (YHOO
), was lower after the stock was downgraded by an analyst at Schwab SoundView.
Biotech company Cephalon (CEPH
) reported a second-quarter net loss as a charge to write off an investment outweighed rising sales of its drugs.
Clothing designer Tommy Hilfiger (TOM
) posted a quarterly loss on weakness in its wholesale business. The company reported a loss of $7.6 million, or 8 cents per share for the fiscal first quarter ended June 30.
Dairy processor Dean Foods (DF
) said that second-quarter earnings fell amid high costs for raw milk. But the company commented that commodity costs are coming down and stuck by its outlook for higher earnings in the third and fourth quarters.
In economic news, an update on new applications for U.S. mortgages fell last week, with less refinancing even amid steady 30-year mortgage rates.
The June update on factory orders showed a rise of 0.7% in the month, while the July reading on the non-manufacturing ISM index showed expansion for the 16th straight month, to 64.8.
Retailers will be under the microscope Thursday as chains report their comparable store sales for the month of July.
However, Thursday will be light on scheduled economic reports and earnings releases. Investors will get an update on weekly jobless claims.
Barr Laboratories (BRL
), Clorox (CLX
), DirectTV Group (DTV
) and XM Satellite Radio (XMSR
) are scheduled to report earnings.
U.S. Treasuries finished higher Wednesday afternoon after reports of a car bomb explosion in Greece. Earlier, a report showing a rise in the services sector and comment from the Treasury that it would maintain reopening sales of the 10-year note had pressured prices. Also, officials said that foreign demand for Treasuries may slow.
The Treasury Dept. will sell a smaller than expected $51 billion in debt at its quarterly refunding next week, reports Informa Global Markets. Of that amount, $22 billion will be raised with the sale of 3-year notes Monday, followed by $15 billion in 5-year notes Wednesday, and $14 billion in 10-year notes on Thursday.
European stock markets finished lower on oil concerns. London's Financial Times-Stock Exchange 100 index fell 21.6 points, or 0.49%, to 4,408.1. In Paris, the CAC 40 lost 43.22 points, or 1.18%, to 3,607.58. Germany's DAX index fell 53.58 points, or 1.38%, at 3,823.74.
Asian stock markets finished lower, also on worries that rising oil prices will hurt economies in the region. Japan's Nikkei 225 index fell 130.55 points, or 1.17%, to 11,010.02. In Hong Kong, the Hang Seng index dipped 76.86 points, or 0.62%, to finish at 12,280.26.