Early Rally Fizzles For Jittery Markets -- U.S. Commentary

(RTTNews) - U.S. stocks tumbled in the final hour of trading to finish near the unchanged line Wednesday, as markets remained skittish after Monday's crash.

The major averages bounced wildly throughout another volatile session, unable to sustain a mid-day rally.

Monday's sell-off was the worst single-day point decline in the history of the Dow Jones Industrial Average, but stocks rebounded a bit Tuesday. Today's lack of direction highlights concerns that stocks remain overbought after a recent rally powered by tax breaks.

The threat of rising inflation, interest rates has emerged, and the 10-year Treasury yield rose after a weak auction. The spectre of a government shut down also rattled investors.

The DJIA lost 20 points, or 0.1 percent, to 24,893, the S&P 500 lost 0.5 percent to 2,681 and the Nasdaq Composite slipped 0.9% to 7,051.

Traders digested mixed remarks from Federal Reserve officials on a day bereft of economic news.

A pick up in consumer prices could warrant as many as four rate hikes by year's end, according to Chicago Federal Reserve President Charles Evans. Still, Evans said the Fed should not raise rates in the first half of the year.

Meanwhile, his colleague Fed New York President William Dudley said the recent downturn in the stock market does not change the outlook for interest rates or the broader economy.

"This wasn't that big a bump in the equity market," Dudley said in New York on Wednesday. "The stock market had a remarkable rise over a very long time with extremely low volatility.

"My outlook hasn't changed just because the stock market's a little bit lower than it was a few days ago. It's still up sharply from where it was a year ago."

In corporate news, Snap (SNAP) shares surged up 40 percent on better-than-expected earnings.

Walt Disney Co.'s (DIS) stock was flat despite strong quarterly profits.

Wynn (WYNN) added 10 percent after Steve Wynn resigned amid sex misconduct allegations.

On the other hand, Chipotle (CMG) was hammered despite meeting profit estimates.

Tronc Inc. (TRNC) surged up 20 percent after announcing its sale of the Los Angeles Times and the San Diego Union-Tribune for $500 million to businessman Patrick Soon-Shiong.