Dow ends 4-day win streak

The report had some sobering news about manufacturing,which had been one of the strongest parts of the economy. While manufacturing expanded in most of the Fed8217;s 12 regions,about half 8211; New York,Cleveland,Kansas City,Chicago,Atlanta and Richmond said manufacturing had 8220;slowed8221; or 8220;leveled off.8221;

Investors weren8217;t surprised by the Fed report,but they also didn8217;t like hearing their own downbeat assessment of the economy confirmed by the central bank.

8220;It does reiterate that the economy is not bouncing back as much as we would hope,8221; Ryan Detrick,senior technical strategist chairman of Schaeffer8217;s Investment Research,said of the beige book.

But Detrick also said the report gave investors an excuse to cash in some of their gains from the market8217;s rally late last week and early this week. The Dow rose almost 420 points in four days as investors bought stocks in response to companies8217; strong second-quarter earnings and upbeat forecasts for the rest of the year.

The Fed survey followed a disappointing Commerce Department durable goods orders report early in the day. Orders for durable goods,which are expected to last at least three years,fell 1 percent in June. Economists expected a 1 percent gain.

Investors have been trying in recent weeks to balance strong earnings and corporate outlooks with economic data that isn8217;t as encouraging. A drop in consumer confidence Tuesday helped push stocks mostly lower although another batch of robust earnings reports came out.

8220;The biggest issue the market is looking at is whether the soft patch in economic data is likely to continue,8221; said Michael Sheldon,chief market strategist RDM Financial Group. 8220;Investors wonder if the strong earnings reports that we have seen are more backwards as opposed to forwards looking.8221;

The Dow fell 39.81,or 0.4 percent,to 10,497.88. The Standard amp; Poor8217;s 500 index fell 7.71,or 0.7 percent,to 1,106.13,while the Nasdaq composite index fell 23.69,or 1 percent,to 2,264.56.

Two stocks fell for every one that rose on the New York Stock Exchange,where volume came to 1 billion shares. Volume has been light even by summer standards,which has added to the day-to-day volatility. Many investors have been staying out of the market while they try to get a clearer sense of how the economy is faring.

Treasury prices,which get a boost from bad economic news,rose after the beige book was released. That sent interest rates lower.

The yield on the 10-year Treasury note,which moves opposite its price,fell to 2.99 percent from 3.05 percent compared with late Tuesday. That yield helps set interest rates on mortgages and other consumer loans.

David Hefty,CEO of Cornerstone Wealth Management,said many investors are waiting for the government8217;s report on gross domestic product,the broadest measure of how the economy is doing,before making any big investing moves.

The report will be issued before trading opens on Friday. Economists surveyed by Thomson Reuters are forecasting that the GDP rose at an annual rate 2.3 percent from April-June. That would be down from the first quarter8217;s 2.7 percent.

Earnings reports were mixed Wednesday. Boeing Co. said its profit slipped from a year ago,but results still topped expectations. The airplane maker also didn8217;t adjust its outlook.

Sprint Nextel Corp. said it added subscribers to its network for the first time in three years during the second quarter as it improves customer service and retention. Its revenue slightly topped forecasts.

ConocoPhillips profit more than doubled as refining margins improved and oil prices rose.

Sprint Nextel rose 1 cent to 4.84. ConocoPhillips was unchanged at 54.44. Boeing fell 1.30 to 67.32.

In Europe,Britain8217;s FTSE 100 fell 0.9 percent,Germany8217;s DAX index dropped 0.5 percent,and France8217;s CAC-40 rose 0.1 percent.