Stocks slipped Wednesday, as investors soured on news that Yahoo was partnering with Microsoft and mulled a weaker-than-expected reading on durable goods orders.
The Dow Jones industrial average (INDU) lost 46 points, or 0.5% around two hours into the session. The S&P 500 (SPX) index fell 6 points, or 0.7%. The Nasdaq composite (COMP) gave up 11 points, or 0.6%.
In addition to the day's news, Wall Street was also vulnerable to a pullback in the wake of a big two-week rally that lifted the Dow and S&P 500 by more than 11% and the Nasdaq by 12%.
The rally was sparked by a series of better-than-expected quarterly results. But with more than half of the S&P 500 companies yet to report, investors are showing a little caution.
Microsoft-Yahoo: The tech bellwethers have finally completed a 10-year search deal that takes aim at Google's dominance in the online market.
Yahoo (YHOO, Fortune 500) will use and promote Microsoft (MSFT, Fortune 500)'s Bing search engine on its site. In exchange, the company will keep 88% of the revenue from all search ad sales for the first five years. Yahoo will also have the right to sell ads on some Microsoft sites.
However, investors expressed some disappointment that Yahoo will not receive an upfront payment, sending its shares down by 11%.
Microsoft attempted to buy Yahoo outright for $47.5 billion last year, but was rebuffed by the company. Microsoft shares gained 1% Wednesday.
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