Consumer stocks prove a drag
NEW YORK — Shaky results from consumer companies dragged the U.S. stock market lower on Tuesday as well-known names Whirlpool and athletic apparel maker Under Armour suffered their worst losses in years.
The Dow Jones industrial average fell 53.76 points, or 0.3 percent, to 18,169.27. The Standard & Poor’s 500 index fell 8.17 points, or 0.4 percent, to 2,143.16. The Nasdaq composite fell 26.43 points, or 0.5 percent, to 5,283.40.
Third-quarter earnings continued to dominate the market, and some of the biggest companies either reported disappointing results or lowered their expectations. Investors wondered whether consumers will spend less money on home improvement, clothing and other goods. But companies including Procter & Gamble and Lockheed Martin soared after their reports. Looking for safer options, some investors bought bonds and utility company shares.
Consumer spending is critical to the U.S. economy, and poor results for consumer-focused companies could be a sign of trouble. But Doug Roman, managing director of equities for PNC Capital Advisors, said it’s too soon to know whether shoppers are closing their wallets.
“The market might be extrapolating bigger stories into broader themes, which might not be the case,” he said. Corporate earnings have been falling for more than a year, and despite Tuesday’s results, investors are growing hopeful that that streak is ending.
Appliance-maker Whirlpool’s results fell far short of analyst projections. Whirlpool, which owns Maytag and KitchenAid, sank $18.37, or 10.8 percent, to $152.09, its largest loss in five years.
Under Armour reported its slowest sales growth in six years and said its future sales won’t be as strong as it expected a year ago. Its stock tumbled $5.01, or 13.2 percent, to $32.89, its biggest drop in almost eight years.
Procter & Gamble had its best day in more than a year after it reported better results than investors had expected. The consumer-products company has been selling some businesses to cut costs, and it posted stronger sales of personal-care products. Its stock rose $2.87, or 3.4 percent, to $86.97.
Oil- and gas-drilling services company Baker Hughes disclosed a smaller loss than investors had expected. Investors were also pleased that Baker Hughes is preparing to cut more costs. The company said it plans to eliminate $650 million in spending this year, up from the $500 million it had planned to cut. It climbed $2.24, or 4.3 percent, to $54.39.
Media and marketing information company Nielsen took its biggest loss ever after it reported shaky results and cut its guidance. Nielsen stock tumbled $9.28, or 16.9 percent, to $45.65.
Benchmark U.S. crude fell 56 cents, or 1.1 percent, to $49.96 per barrel in New York. Brent crude, the international standard, fell 67 cents, or 1.3 percent, to $50.79 a barrel in London.
Bond prices edged higher. The yield on the 10-year Treasury note fell to 1.76 percent from 1.77 percent. Investors also bought shares of utility companies.