Auto-sale drop holds back stocks
NEW YORK — Despite strong results from industrial companies, U.S. stocks couldn’t gain momentum Tuesday after automakers said their sales are shrinking.
The Standard & Poor’s 500 index rose 2.84 points, or 0.1 percent, to 2,391.17. The Dow Jones industrial average rose 36.43 points, or 0.2 percent, to 20,949.89. The Nasdaq composite set another record as it picked up 3.76 points, or 0.1 percent, to 6,095.37. The Russell 2000 index of small-company stocks fell 8 points, or 0.6 percent, to 1,399.36.
Engine-maker Cummins sent manufacturers and other industrial companies higher after reporting solid first-quarter earnings. A late slump took the price of oil to its lowest price in almost six months. Ford, General Motors and Fiat Chrysler all fell after they said sales declined in April.
Chris Zaccarelli, chief investment officer for Cornerstone Financial Partners, said auto sales have weakened because lenders are growing a bit hesitant to make loans to help people buy cars.
“It’s more a story specific to the auto sector as opposed to a slowdown in consumer spending,” he said.
The six largest automakers in the United States all said their sales fell in April. Vehicle sales have set records the past few years and analysts are worried the streak is ending and car companies are relying too much on discounts and incentives to keep their sales numbers high.
Ford shares fell 50 cents, or 4.4 percent, to $10.92 and GM fell $1, or 2.9 percent, to $33.20 while Fiat Chrysler skidded 49 cents, or 4.3 percent, to $10.92. Car retailers, rental companies and parts suppliers slipped as well.
Industrial companies made some of the biggest gains. Cummins reported a far bigger profit and better sales than analysts expected, and its stock climbed $9.23, or 6.1 percent, to $160.56. The company said demand from construction and mining sales grew compared with the same period a year ago, but truck production in North America fell.
Benchmark U.S. crude fell $1.18, or 2.4 percent, to $47.66 a barrel in New York. That’s its lowest price since mid-November. Brent crude, used to price international oils, shed $1.06, or 2.1 percent, to $50.46 a barrel in London.
Apple gained 93 cents to $147.51 during regular trading. Its stock lost 2 percent in aftermarket trading after the company reported results that included slightly disappointing quarterly iPhone sales. Its guidance also wasn’t as strong as investors hoped.
Consumer products companies slipped. Shares of drugstore operator and pharmacy benefits manager CVS Health fell $2.96, or 3.6 percent, to $79 and agricultural company Archer-Daniels-Midland shed $4.06, or 8.9 percent, to $41.67 after their respective earnings reports.
Bond prices headed higher. The yield on the 10-year Treasury note fell to 2.28 percent from 2.32 percent.
In other energy trading, wholesale gasoline dipped 1 cent to $1.51 a gallon. Heating oil lost 2 cents to $1.47 a gallon. Natural gas gave up 2 cents to $3.20 per 1,000 cubic feet.
Gold rose $1.50 to $1,257 an ounce. Silver fell 1 cent to $16.83 an ounce. Copper lost 3 cents to $2.64 a pound.