U.S. Stocks Climb Off Worst Levels But Close Mostly Lower

Stocks regained ground after an early move to the downside on Wednesday but still ended the day mostly lower. The major averages all finished the day in negative territory following the mixed performance on Tuesday, with the Dow closing lower for the third consecutive session.

After falling by more than 200 points in early trading, the Dow ended the day down just 23.39 points or 0.1 percent at 38,949.02. The S&P 500 dipped 8.42 points or 0.2 percent to 5,069.76, while the Nasdaq slid 87.56 points or 0.6 percent at 15,947.74.

The early weakness on Wall Street came as some traders looked to cash in on the recent strength in the markets ahead of the release of closely watched readings on consumer price inflation on Thursday.

The inflation readings, which are said to be preferred by the Federal Reserve, are expected to show the annual rate of consumer price growth slowed to 2.4 percent in January from 2.6 percent in December.

The annual rate of growth by core consumer prices, which exclude food and energy prices, is also expected to dip to 2.8 percent in January from 2.9 percent in December.

With Fed officials saying they need greater confidence inflation is slowing before they consider cutting interest rates, the data could have a significant impact on the outlook for rates.

Selling pressure waned shortly after the start of trading, however, with the subsequent recovery attempt potentially reflecting a positive reaction to revised data showing the U.S. economy grew by slightly less than previously estimated in the fourth quarter of 2023.

The Commerce Department said the jump by real gross domestic product in the fourth quarter was downwardly revised to 3.2 percent from the previously reported 3.3 percent. Economists had expected the surge in GDP to be unrevised.

“It is only in the topsy-turvy world of Wall Street where bad news can be good news (e.g. lower economic growth is good) because of the interplay between the economy, markets and the Federal Reserve,” said Chris…