U.S. stocks fluctuated early Wednesday, after erasing earlier gains, as declines in commodity shares offset a rally in Apple Inc. and Yahoo! Inc. before the Federal Reserve’s interest rate decision.
Energy companies slumped 1.7 percent as a group after oil retreated. Apple climbed 6.4 percent after reporting a record $18 billion in quarterly profit, one of the biggest in corporate history. Yahoo rose 1.7 percent after saying it will spin off its remaining stake in Alibaba Group Holding Ltd. Boeing Co. advanced 4.8 percent as it posted a quarterly profit that beat analysts’ estimates.
The Standard & Poor’s 500 Index fell 0.2 percent to 2,024.71 at 11:17 a.m., erasing an earlier gain of 0.6 percent. The Nasdaq 100 added 0.4 percent, paring an early rally of 1.7 percent after falling the most since April on Tuesday. The Dow Jones Industrial Average lost 14.26 points, or less than 0.1 percent, to 17,372.95. Trading in the S&P 500 was 28 percent above the 30-day average for this time of the day.
“The energy situation is one where the price of oil is going to be an ugly thing until such time as it’s not,” Brian Barish, who helps oversee about $11.5 billion at Denver-based Cambiar Investors LLC.
Disappointing results from Caterpillar Inc. and Microsoft Corp. weighed on U.S. equities Tuesday, sending the Dow Jones Industrial Average tumbling 1.7 percent.
While the dollar’s climb is reducing profits at U.S. companies from Procter & Gamble Co. to Pfizer Inc. and Microsoft, more than 77 percent of S&P 500 members have still beaten analysts’ estimates so far this earnings season, according to data compiled by Bloomberg.
“We’re looking at a brighter earnings picture this morning,” Yousef Abbasi, the global market strategist at JonesTrading Institutional Services LLC in New York, said by phone. “I think the Fed will be a non-event. A lot of people are expecting it to be highly reiterative of what we’ve seen in Fed speak for the past few weeks.”
Facebook Inc. and Boeing Co. are among 31 companies releasing quarterly results Wednesday.
Investors are also awaiting the Fed decision on interest rates, due at 2 p.m. in Washington. While 2014 was the strongest year of employment growth in 15 years, policy makers have shown concern regarding slower growth overseas. After its December meeting, the Fed said it can be “patient” in starting to raise rates for the first time since 2006.
Fed officials will look past low inflation and stay focused on raising interest rates around mid-year, according to a narrow majority of economists surveyed by Bloomberg News. Some 53 percent also said the rise in the dollar against major currencies makes no difference to the timing of a rate increase.
Energy shares lost 1.6 percent, the most in two weeks, as oil tumbled as U.S. inventories rose to a three-decade high. Exxon Mobil Corp., Chevron Corp. and Schlumberger Ltd. fell at least 1.2 percent.
Apple jumped 6.4 percent. Net income surged 38 percent, fueled by sales of larger-screened iPhones and refreshed Mac computers that Apple had unveiled in September, part of a barrage of new products from Chief Executive Officer Tim Cook as he sought to revitalize the company’s revenue.
Yahoo rose 1.7 percent. The tax-free spinoff will place Yahoo’s holding in the Chinese e-commerce company into a new firm called SpinCo. That firm will own all of Yahoo’s shares in Alibaba, valued at about $40 billion.
Boeing gained 4.8 percent, the most in more than a year, as it beat analysts’ estimates and predicted it would make good in 2015 in converting a record jetliner-order backlog into cash. Investors have been waiting to see Boeing start generating more cash from its plane orders and stem losses on the 787 Dreamliner.
AT&T Inc. advanced for the first time in five sessions, adding 1 percent, after the wireless carrier topped profit and sales projections as more customers than analysts estimated were lured in by the company’s phone and tablet promotions.