Stock indexes veer mostly lower, add to steep drops this week

Major U.S. stock indexes edged mostly lower Wednesday afternoon as a rally in technology companies offset some of the losses elsewhere in the market.

The benchmark S&P 500 was modestly lower after swinging between a 0.6% loss and 1.7% gain. Smaller company stocks were down sharply. The bond market continued to flash warning signs as long-term Treasury yields fell further below short-term yields.

Worry about economic fallout from the virus outbreak that originated in China fueled a sharp sell-off this week that wiped out the market's gains for the year.

The virus continues to spread and threatens to hurt industrial production, consumer spending, and travel. More cases are being reported in Europe and the Middle East. Health officials in the U.S. have been warning Americans to prepare for the virus.

“The market is still digesting the full impact of what the coronavirus could mean for global GDP growth and, more importantly, on earnings growth for a lot of companies,” said Nadia Lovell, U.S. equity strategist at J.P. Morgan Private Bank.

Energy companies led the selling Wednesday as oil prices declined. Comarex Energy lost 4.9%. Cruise operators including Royal Caribbean and Carnival continued to fall sharply, deeping a rout that began a month ago. Both stocks have lost more than 30% over the past month.

Companies that rely on consumer spending and industrial stocks also fell. Those losses outweighed gains in technology and health care stocks.

The tech sector was among the worst hit by sell-offs this week as many of the companies rely on global sales and supply chains that could be stifled by the spreading outbreak. Microsoft rose 1.4% and Adobe rose 1%.

Drugmaker Pfizer rose 2.4% was among the gainers in the health care sector.

Bond prices continued to rise, pushing yields lower. The yield on the 10-year Treasury slipped to 1.32% from 1.33% late Tuesday. The yield on the 3-month Treasury bill edged up to 1.53%. The inversion in the yield between the 10-year and the 3-month Treasurys is a red flag for investors, because it has been a warning signal that has a fairly accurate track record of preceding the last seven recessions.

TJX, the parent of retailer TJ Maxx, surged 6.5% after beating Wall Street's fourth-quarter profit forecasts and raising its dividend.

VIRUS UPDATE: The virus outbreak has now infected more than 81,000 people globally and continues spreading. Brazil has confirmed the first case in Latin America. Germany, France and Spain were among the European nations with growing caseloads. New cases are also being reported in several Middle Eastern nations.

President Donald Trump will hold a news conference later Wednesday, along with representatives from the Centers for Disease Control, to discuss the virus.

KEEPING SCORE: The S&P 500 fell 0.2% as of 3:37 p.m. Eastern time. Following its two-day drop, the index is down 7.9% from the record high it reached last Wednesday.

The Dow Jones Industrial Average slid 85 points, or 0.3%, to 26,996. The Nasdaq rose 0.3%. The Russell 2000 index of smaller company stocks fell 1%.

European markets were mostly higher and Asian markets fell.

MOUSE EXIT: Disney fell 3.5% following Bob Iger’s surprise announcement that he will immediately step down as CEO of the giant entertainment company. Iger steered the company’s absorption of big moneymakers, including Star Wars, Pixar, Marvel and Fox's entertainment businesses. He also oversaw the launch of the Disney Plus streaming video service.

LINGERING MALADY: Cruise operators and some other companies that depend on travelers continued falling as virus fears persist. Norwegian Cruise Line Holdings fell 6.9% and Expedia lost 7.2%.

BUSTED BUILDER: Toll Brothers slid 14.2% after the homebuilder reported disappointing fiscal first-quarter profit. The poor results initially weighed on some of its rivals, but most of them recovered by midday. A government report Wednesday showed that sales of new homes jumped 7.9% in January to the fastest pace in more than 12 years.

___

AP Business Writer Damian J. Troise contributed.