Stocks give up early gains; Yahoo drops

The stock market was heading for a second loss in a row Wednesday. Banks and retailers, which would stand to lose the most if the economy slows down, led the declines. Chipotle Mexican Grill fell sharply as the company disclosed a federal investigation into its E. coli outbreak, and Yahoo sank after the troubled Internet company announced layoffs and plans to sell businesses.

The Dow Jones industrial average was down 114 points, or 0.7%, to 16,042 as of 11:12 a.m. EST. The Standard & Poor’s 500 index slid 20 points, or 1.1%, to 1,882 and the Nasdaq composite fell 71 points, or 1.6%, to 4,445.

SAFETY: Investors moved money into traditional safety plays: dividend-paying companies, U.S. government bonds, and precious metals.

The Dow Jones utility index, a basket of 15 utility companies, rose 1%. That index is up more than 8% this year. Utilities and other dividend stocks are popular at times of uncertainty because they provide a regular return and are large, mature businesses that tend to stand up well during economic downturns.

Bond prices rose. The yield on the benchmark U.S. 10-year note fell to 1.83% from 1.85% the day before. Gold rose $12.10, or 1%, to $1,139 an ounce.

BANKING ISSUES: Financial stocks were getting another beat-down. Investors worry that lenders could suffer if more energy companies default on their loans. They also think the Federal Reserve might postpone its interest rate increases. Those increases would help banks earn more money by raising the rates they charge on loans.

Bank of America fell 52 cents, or 4%, to $12.72. Morgan Stanley fell 68 cents, or 3%, to $23.83. JPMorgan Chase fell $1.26, or 2%, to $55.76.

ENERGY RECHARGE: Crude oil prices recovered some ground after two days of steep losses. New York crude gained $1.47, or 5%, to $31.36 a barrel. Brent crude, used to price international oils, jumped $1.65, or 5%, to $34.39 a barrel in London.

EUROPE WANING TOO: Among the economic worries this week, added to the mix Wednesday were renewed fears over the slowdown in Europe. A purchasing managers survey by Markit fell in January, a sign that the turmoil in global financial markets is beginning to weigh on business.

CUTBACKS: Yahoo slumped $2.10, or 7%, to $27 after the company announced late Tuesday that it would cut 1,700 jobs and sell some of its struggling businesses.

ON A DIET: Chipotle fell $28.87, or 6%, to $447.83 after the company said the E. coli outbreak at its stores hurt sales more than anticipated. Chipotle also disclosed it is under investigation by federal regulators over the outbreak.