North American stocks fell on Wednesday on more indications that the U.S. economic recovery is far from secure.
The Dow Jones industrial average closed at 10,497.88, down 39.81 points, or 0.4 per cent. The broader S&P 500 closed at 1106.13, down 7.71 points or 0.7 per cent. In Canada, the S&P/TSX composite index closed at 11,696.63, down 20.06 points, or 0.2 per cent.
While the latest round of second quarter financial results were mixed - with Boeing Co. topping expectations with its earnings but missing on revenues - investors seemed more concerned about back-to-back dismal readings on the U.S. economy.
The Commerce Department reported early in the day that durable goods orders fell 1 per cent in June from the previous month. That came as a shock to observers who had been expecting a 1 per cent gain, and a sign that the appetite for big-ticket items is weaker than expected.
Later in the afternoon, the U.S. Federal Reserve released its latest Beige Book on economic conditions in 12 districts, highlighting that the economic recovery is slowing down. Housing and construction sectors remained weak, while retail spending grew at a sluggish pace. The report shouldn't surprise investors - it comes a week after Fed Chairman Ben Bernanke warned that the economic recovery is uncertain - but it adds to the growing pessimism about the second half of the year.
This also helps explain why major stock market indexes have barely budged amid a steady stream of upbeat second quarter results. Since the unofficial start of the second quarter earnings season on July 12, the S&P 500 has risen just 1 per cent, even as a large majority of companies have topped analysts' expectations.