US STOCKS-Market ends lower on Intel disappointment
(Updates to close)
NEW YORK, Jan 16 (Reuters) -U.S. stocks fell on Wednesday, after Intel Corp (INTC.O) posted both a disappointing profit and outlook, driving the S&P 500 to its lowest closing level in 14 months.
The poor results from Intel, the world's largest chip maker, came on the heels of poor retail sales data on Tuesday, dismal banking results and a slew of indicators showing the U.S. economy may be on the brink of a recession.
Investors also unloaded Apple Inc's (AAPL.O) shares for a second day, after the maker of the iPod failed to inspire with new products at its Macworld convention.
But stocks traded on a roller-coaster ride on Wednesday, with the Dow rising and falling by as much as 100 points, as investors bought up beaten-down bank stocks, after JPMorgan Chase & Co (JPM.N) posted a profit despite turmoil in the credit market.
The results from the No. 3 U.S. bank, though worse than expected, provided comparative relief from the gloom cast by Citigroup's (C.N) record quarterly loss on Tuesday. A smaller-than-expected profit decline by Wells Fargo & Co (WFC.N), the No 2. U.S. mortgage lender, also helped.
"Intel made the market queasy," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey. "Investors were looking for confirmation that companies with overseas exposure will do well -- and Intel didn't provide that."
The Dow Jones industrial average .DJI was down 34.95 points, or 0.28 percent, at 12,466.16. The Standard & Poor's 500 Index .SPX was down 7.75 points, or 0.56 percent, at 1,373.20. The Nasdaq Composite Index .IXIC was down 23.00 points, or 0.95 percent, at 2,394.59.
Lending some support during the session was news that a legislative package to stimulate the U.S. economy and avert a recession could be signed into law within a month. [ID:nN16621183]
That helped some hard-hit sectors like home builders and home-funding providers Fannie Mae (FNM.N) and Freddie Mac (FRE.N). The Dow Jones home construction index .DJUSHB rose 3.7 percent.
But Fannie and Freddie cut their gains after the U.S. Treasury Department said it would not support raising the size of home loans the two lenders may buy before a comprehensive reform package is passed by lawmakers.
Earlier, the Federal Reserve said in its Beige Book survey of economic conditions that while the U.S. economy continued to grow in the final weeks of the fourth quarter, the pace of activity slackened amid subdued holiday spending and a weak housing sector.
And a government report showed that while U.S. shoppers faced moderate price rises in December, that capped a year in which prices soared at the sharpest rate in 17 years, pressuring households already dealing with a steep housing downturn and tighter credit.
JPMorgan shares rose 5.8 percent to $41.43. Wells Fargo rose 3.3 percent to $27.37.
Shares of Intel dropped 12.4 percent to $19.88 on the Nasdaq. Other major tech shares trading sharply lower were Apple, down 5.6 percent to $159.64, and Blackberry maker Research in Motion Ltd (RIM.TO)(RIMM.O), down 1.8 percent to $89.30. Continued...
