Terrorism fears and a record antitrust fine for Microsoft Corp. gave Wall Street another volatile session Wednesday, with stocks staggering to a mixed finish after four days of declines.
The market fell on a late-morning report that a French railway worker had found a bomb under a passenger line between Paris and Basel, Switzerland, but prices recovered when it became clear that the device had been defused. Yet buyers remained scarce, and only the technology-heavy Nasdaq composite index, buoyed by a lift in semiconductor stocks, was able to stay in positive ground.
“I think the market is trying to price in terrorism right now,” said Brian Williamson, an equity trader at The Boston Company Asset Management. “That has really been adding into the sell pressure that we’ve seen in the last few sessions.”
The Dow Jones industrial average lost 15.41, or 0.2 percent, to close at 10,048.23, after drifting in and out of positive territory for much of the day.
Broader stock indicators were mixed. The Standard & Poor’s 500 index shed 2.62, or 0.2 percent, to 1,091.33. The Nasdaq added 7.68, or 0.4 percent, to 1,909.48.
The European Union fined Microsoft $613 million for abusing its “near monopoly” on the Windows operating system by bundling other software with it in an attempt to thwart competitors. The company also must provide European users with a version of the software without its digital media player, and release its closely guarded code to rivals in the office server market so their products can work more smoothly with Windows.
Microsoft, which has argued that bundling its media player into the operating system benefits consumers, plans to appeal the decision. Its shares advanced 26 cents to $24.41, as some investors welcomed an end to the uncertainty surrounding the case.
Investors were also pleased with an upbeat report from the Commerce Department, which said orders for durable goods rose 2.5 percent last month, more than double what economists expected. The reading far outpaced January’s 2.7 percent decline.
The attempted railway bombing outside Paris cast a pall over the market, however, and underscored Wall Street’s vulnerability to world events.
Still shocked by this month’s train bombings in Madrid, the markets were further rattled this week by Israel’s assassination of Hamas spiritual leader Sheik Ahmed Yassin, and the resulting threats against the United States from Palestinian militants vowing to avenge his death.
Some investors may have been reassured when the new Hamas leader backed away from those threats Wednesday. But the markets will need stronger economic data, and more of it, to shake off the lack of conviction stemming from terrorism concerns, said Peter Cardillo, chief market strategist with S.W. Bach & Co.
“I think this market is going through a crisis of fear, based on the geopolitical situation that is diverting the markets’ attention from good corporate earnings news and some good economic numbers,” Cardillo said. “I think when we get that slew of economic data next week and some earnings, then the market will react in a more positive way.”
Semiconductor stocks were broadly higher after Applied Materials Inc. said it would extend its stock repurchase program, buying back up to $3 billion of its common stock over the next three years. Stock buybacks, which give remaining shareholders a larger percentage ownership of the company by reducing the number of outstanding shares, are usually viewed as a positive signal in the market. Applied Materials gained 41 cents to $20.77.
One of Microsoft’s up-and-coming competitors, Linux distributor Red Hat Inc., climbed 60 cents to $20.01 after it swung to a profit in the latest quarter, meeting Wall Street expectations.
AT&T Corp. said it plans to increase voice-over-Internet technology offerings for businesses, giving them an alternative to traditional phone service. AT&T rose 5 cents to $19.42.
Teva Pharmaceutical and Endo Pharmaceuticals Holdings Inc. both received U.S. Food and Drug Administration approval to make generic versions of the popular OxyContin painkillers. Teva gained 56 cents to $61.80, while Endo jumped $2.55, or 13 percent, to $22.68.
Declining issues outnumbered advancers about 2 to 1 on the New York Stock Exchange. Volume was light.
The Russell 2000 index of smaller companies was down 3.29, or 0.6 percent, at 557.63.
Overseas, Japan’s Nikkei stock average finished 0.7 percent higher. In Europe, France’s CAC-40 lost 0.6 percent, Britain’s FTSE 100 closed down 0.2 percent, and Germany’s DAX index lost 0.1 percent.
