US stock indexes sag as a two-day rally peters out

FILE - This Tuesday, Oct. 25, 2016, file photo shows the New York Stock Exchange at sunset, in lower Manhattan. Global stock markets edged lower Wednesday, Aug. 23, 2017, as investors treaded carefully ahead of an annual gathering of central bankers. (AP Photo/Mary Altaffer, File)

NEW YORK (AP) — Stocks pulled back on Wednesday and gave back some of their gains from a day earlier, when the Standard & Poor’s 500 index had one of its best days of the year.

Retailers and advertising companies had some of the steepest drops on worries about their earnings. Prices for Treasury bonds and gold rose modestly as investors sought safer ground.

KEEPING SCORE: The Standard & Poor’s 500 index was down 6 points, or 0.3 percent, at 2,446, as of 3:10 p.m. Eastern time. It gave back a quarter of its big gain from Tuesday. The S&P 500 had been on a two-day winning streak after pulling out of a nearly two-week slump.

The Dow Jones industrial average fell 66 points, or 0.3 percent, to 21,833, and the Nasdaq composite lost 14, or 0.2 percent, to 6,283. The Russell 2000 index of small-cap stocks fell less than a point, or 0.1 percent, to 1,371.

HAMMERED: Lowe’s had one of the biggest losses in the S&P 500 after it said profit and revenue were weaker last quarter than analysts expected. It also gave a profit forecast for the year that fell below Wall Street’s expectations. Lowe’s dropped $3.25, or 4.3 percent, to $72.55.

A report showing that sales of new homes were weaker in July than economists expected didn’t help.

AD WOES: Advertising companies were also weak after industry giant WPP cut its forecast for revenue this year. It said clients are feeling pressure to control their spending, and WPP’s shares sank 10.9 percent in London. In the U.S., Omnicom Group fell $5.13, or 6.6 percent to $73.00, and Interpublic Group lost $1.17, or 5.6 percent, to $19.73.

POLITICS AND PROSE: Worries about politics were a big reason for the market’s stumbles in recent weeks. In Washington, the concern is about whether the government can push through tax cuts and other pro-business policies that were considered slam dunks early this year. Now, the market seems to have little to no expectation for much help coming from Washington, said Katie Nixon, chief investment officer at Northern Trust Wealth Management.

“Actions speak louder than words, and when we see actual action, you’ll see markets sit up and take notice,” she said. “But so far it’s been a rhetorical exercise.”

She said that she noticed CEOs talking a lot about their hopes for tax reform or infrastructure spending earlier this year, when companies were reporting their results for the January-through-March quarter. But in the earnings reporting season that’s just wrapping up, she heard much less of such talk.

The government is coming close to crucial deadlines, including one to increase its borrowing authority in order to avoid a default on its debt and another to prevent a government shutdown. In a speech late Tuesday, President Donald Trump said that “if we have to close down our government, we’re building that wall” that he wants on the border between Mexico and the United States. He also said that he thinks the U.S. government will “end up probably terminating” the North American Free Trade Agreement with Canada and Mexico, though he also said that he has yet to make up his mind.

CENTRAL BANK WATCH: Besides Washington, markets are also looking toward the mountains of Wyoming, where central bankers from around the world will meet at the end of the week.

The heads of the Federal Reserve and the European Central Bank are expected to speak at the symposium, which begins Thursday. Tremendous aid from those two and other central banks around the world have helped to drive prices for all kinds of investments higher since the Great Recession, and investors are waiting to hear if any change is upcoming.

Most analysts expect to hear nothing surprising at the meeting. The Fed has already begun raising interest rates and is preparing to pare back the $4.5 trillion in Treasurys and other investments it’s amassed.

YIELDS: Prices for Treasurys rose, which in turn pushed down yields. The 10-year Treasury yield fell to 2.17 percent from 2.21 percent late Tuesday. The two-year yield dipped to 1.30 percent from 1.33 percent, and the 30-year yield dropped to 2.75 percent from 2.79 percent.

MARKETS ABROAD: European markets dipped, with the French CAC 40 down 0.3 percent, Germany’s DAX down 0.5 percent and the FTSE 100 in London close to flat.

In Asia, Japan’s Nikkei 225 rose 0.3 percent, while South Korea’s Kospi was virtually flat.

CURRENCIES: The dollar fell to 108.97 Japanese yen from 109.52 yen late Tuesday. The euro rose to $1.1818 from $1.1752, and the British pound fell to $1.2802 from $1.2828.

COMMODITIES: Benchmark U.S. crude oil rose 58 cents to settle at $48.41 per barrel. Brent crude, the international standard, rose 70 cents to $52.57 per barrel.

Gold rose $3.70 to settle at $1,294.70 per ounce, silver gained 6 cents to $17.05 per ounce and copper slipped a penny to $2.98 per pound.

Natural gas fell 1 cent to $2.93 per 1,000 cubic feet, heating oil rose 3 cents to $1.62 per gallon and wholesale gasoline gained 3 cents to $1.62 per gallon.