An early rally fades, leaving stocks modestly lower

U.S. stocks closed lower on Wednesday after a late-afternoon slide erased modest gains made earlier in the day.

The decline added to the market’s losses from the day before and came as crude oil prices fell and investors focused primarily on the latest wave of companies reporting quarterly financial results.

Yahoo slumped 5 percent after reporting a sharp drop in a closely watched measure of revenue, while Chipotle Mexican Grill tumbled 5.7 percent after the restaurant chain’s results fell short of Wall Street’s expectations.

Not all the earnings news was bad. Investors bid up shares in General Motors, which climbed 5.8 percent, and Biogen, which rose 4 percent, among others.

Only about a quarter of the companies slated to report their results have done so.

“As we get a fuller picture of how (third-quarter) earnings are going to wind up shaking out, that will give people more of a comfort level in terms of the directional cues in the market,” said Mike Ryan, chief investment strategist at UBS Wealth Management Americas.

A roaring start to Ferrari’s market debut and news about a couple of corporate deals also failed to keep the market from slipping into the red.

The Dow Jones industrial average fell 48.50 points, or 0.3 percent, to 17,168.61. The Standard & Poor’s 500 index lost 11.83 points, or 0.6 percent, to 2,018.94. The Nasdaq composite slid 40.85 points, or 0.8 percent, to 4,840.12.

The major stock indexes started trading higher early Wednesday, but lost momentum by midmorning. They drifted between small gains and losses until the last half-hour of trading, then veered lower.

Investors have been reviewing company earnings this week as they hunt for insight into how the global economy is doing.

All told, 104 companies in the S&P 500 index have reported third-quarter earnings so far. Some 69 percent of those have reported results that beat Wall Street’s expectations. That’s better than the historic average of 66 percent, according to S&P Capital IQ.

Traders cheered General Motors’ latest quarterly results, including strong North American sales that helped GM overcome $1.5 billion in costs from its deadly ignition switch problem. The stock gained $1.94 to $35.42.

Biogen also rose, adding $10.53 to $276.34 after the biotechnology said it will cut 11 percent of its workforce and disclosed that its third-quarter profit and revenue topped expectations.

Some companies’ results prompted traders to sell.

Chipotle Mexican Grill lost $39.96 to $665.67, while Yahoo shed $1.71 to $31.12.

Nine of the 10 sectors in the S&P 500 moved lower. Energy stocks fell the most, about 1 percent. The sector is down 15.5 percent this year. Industrial stocks bucked the trend notching a tiny gain.

In Europe, Germany’s DAX was up 0.9 percent, while the CAC-40 in France rose 0.5 percent. The FTSE 100 index of leading British shares rose 0.1 percent. In China, the Shanghai Composite Index took a hit from selling of heavy industrials. The Shanghai benchmark fell 3.1 percent. Japan’s Nikkei 225 gained 1.9 percent and South Korea’s Kospi was up 0.2 percent. Hong Kong’s market was closed for a public holiday.

Benchmark U.S. crude fell $1.09 to close at $45.20 a barrel in New York. Brent crude, used to price international oils, fell 86 cents to $47.85 a barrel in London.

In other trading, wholesale gasoline rose 0.3 cents to close at $1.281 a gallon on the New York Mercantile Exchange. Heating oil rose 0.1 cent to $1.45 a gallon, and natural gas fell 7.2 cents to close at $2.404 per 1,000 cubic feet.

U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.03 percent from 2.07 percent the day before.

In currency action, the euro fell to $1.1342, while the dollar rose to 119.94 yen.

Precious and industrial metals futures ended lower. Gold fell $10.40 to $1,167.10 an ounce, silver slid 20 cents to $15.71 an ounce and copper slipped less than a penny to $2.36 a pound.

Among the other stocks making big moves:

—— Ferrari, founded in 1929 by Italian sports driver Enzo Ferrari, surged 5.8 percent in its stock market debut. The shares, which priced at $52, added $3 to $55.

—— KLA-Tencor shares vaulted 18.8 percent on news the semiconductor company is being acquired by Lam Research for about $10.6 billion. KLA-Tencor climbed $10.12 to $63.98. Shares in Lam Research gained 76 cents, or 1.1 percent, to $70.79.