KEEPING SCORE: The Dow Jones Industrial Average slipped 48 points, or 0.3 percent, to 16,817 as of 12:40 p.m. Eastern time. The Standard & Poor’s 500 index fell five points, or 0.3 percent, to 1,972. The Nasdaq composite edged down 21 points, or 0.4 percent, to 4,668.
The Dow and S&P 500 both climbed more than 2 percent Tuesday, while the Nasdaq rose almost 3 percent, its biggest gain since August.
IN THE WEEDS: Agribusiness giant Monsanto fell after cutting its annual profit forecast because of the strong dollar, competition from lower-cost generic products and lower commodity prices. The stock tumbled $6.85, or 7.4 percent, to $85.64. It’s on pace for its biggest loss in four years.
TAKE A DRINK: Spirits maker Brown-Forman, whose brands include Jack Daniels, fell $2.35, or 2.4 percent, to $95.31, after lowering its own profit estimates. The company makes 60 percent of its sales overseas, and it’s being affected by the strong dollar, cutbacks in travel, and weak economies in some emerging markets.
DOLLAR WOES: The strength of the dollar hurts U.S. companies in a variety of ways when they do business overseas: it makes their products more expensive compared to locally-produced goods, and it reduces their revenue when it’s translated back into dollars.
Katie Nixon, chief investment officer of wealth management Northern Trust, said that matters because economic growth is so slow right now. So if U.S. goods are more expensive than locally-made ones, that’s a problem.
TAKE FIVE: Sporting goods retailer Big 5 Sporting Goods fell $1.46, or 11 percent, to $11.83, as it offered a weak profit forecast, and competing retailer Sports Authority said it will file for Chapter 11 bankruptcy protection. Sports Authority said it plans to close or sell about 140 stores, or almost a third of its locations.
JOBS: ADP, a payroll processing company, said private U.S. businesses added a healthy 214,000 jobs last month. That’s the latest positive sign for the economy after reports on construction and manufacturing on Tuesday. The federal government will release its jobs report on Friday.
SEEKING STABILITY: Bond prices fell. The yield on the 10-year Treasury note rose to 1.86 percent from 1.82 percent a day earlier. Bond yields also climbed on Tuesday.
“The Treasury yield is increasing because the economy is better than people had feared and investors feel that the Fed is going to hike rates,” Nixon said.
Bond yields are still relatively low. That has helped telecommunications and utility stocks, which are seen as less volatile stocks that tend to pay high dividends. Investors have been favoring them in recent months as the rest of the market turned turbulent. They are the best performing sectors in the market so far this year.
MORE EARNINGS: Digital health and wellness company Everyday Health leapt $1.09, or 23.4 percent, to $5.75, following a strong quarterly report. Insurance software company Guidewire Software also rose $1.46, or 2.9 percent, to $51.98 after its profit and sales surpassed expectations.
OVERSEAS: Germany’s DAX rose 0.6 percent and France’s CAC rose 0.4 percent. The FTSE 100 index of leading British shares dipped 0.1 percent after asset manager BlackRock warned that if the U.K. votes to leave European Union, the economy will be “economically worse off.”
A weak yen added to investor optimism, sending Japan’s benchmark Nikkei 225 up 4.1 percent. Hong Kong’s Hang Seng added 3.1 percent.
ENERGY: Benchmark U.S. crude edged up 23 cents to $34.64 a barrel in New York. Brent crude, the benchmark for international oil, rose 14 cents to $36.95 a barrel in London.
CURRENCIES: The euro slipped to $1.0847 from $1.0868 and the dollar fell to 113.89 yen after climbing to 114.05 yen Tuesday.