Energy, tech stocks decline
Most indexes fall, but Dow rises 9 points for its 8th gain in a row.
Losses for energy and technology companies left most U.S. stocks lower Thursday. Smaller companies fared worse as the dollar remained at 15-month lows.
Energy companies weakened as the price of oil turned lower, and technology companies declined as Apple gave up a piece of its big gain from the day before. Investors bought government bonds after some shaky economic news in the U.S. and the U.K. That sent bond yields down, which hurt financial companies. Industrial companies like 3M did well, and so did large drugmakers like Pfizer.
Small companies, which surged in November and December, have slumped this week. Firearms maker Sturm Ruger tumbled Thursday after it said sales fell in the second quarter, and sporting goods companies like Big 5 and Vista Outdoor also sank. Smaller banks fared worse than larger ones.
Julian Emanuel, an equity strategist for UBS, said that as the dollar continues to lose strength, investors are selling smaller and more domestically focused companies and buying more international businesses, as the weaker dollar will help their profits and sales outside the U.S.
“Most people didn’t expect the degree of dollar weakness that we’re seeing,” he said. The ICE U.S. Dollar Index is down 9 percent this year and hasn’t been this low in about 15 months.
The Standard & Poor’s 500 index shed 5.41 points, or 0.2 percent, to 2,472.16. The Dow Jones industrial average notched
its eighth gain in a row and added 9.86 points, or less than 0.1 percent, to 22,026.10. The Nasdaq composite lost 22.30 points, or 0.4 percent, to 6,340.34. The Russell 2000 index of smaller companies sank 7.67 points, or 0.5 percent, to 1,405.23 after a sharp loss a day ago.
Companies have reported strong second-quarter results lately as corporate earnings continue to grow, but with stocks at record highs, the market hasn’t reacted very much: The S&P 500 is flat over the last two weeks.
Companies that didn’t live up to investors’ expectations took losses. Security software maker Symantec announced disappointing first-quarter sales, and its forecasts for the rest of the year weren’t as good as analysts had hoped. The company also agreed to sell its website security business to DigiCert for $950 million in cash and a 30 percent stake in DigiCert. Symantec slid 64 cents, or 2.1 percent, to $30.27.
3D printer maker 3D Systems plunged $3.62, or 21.3 percent, to $13.39 after it fell short of Wall Street estimates in the second quarter and cut its projections for the full year. Elsewhere, Apple lost $1.57, or 1 percent, to $155.57 after a big jump the day before.
Oil prices turned lower. Benchmark U.S. crude dipped 56 cents, or 1.1 percent, to $49.03 a barrel in New York. Brent crude, the international standard, fell 35 cents to $52.01 a barrel in London.
The Institute for Supply Management said production, orders and hiring by U.S. services companies all declined in July. Its services index slipped to its lowest reading in 11 months, which suggests the economy is still growing at a steady but modest pace.
Meanwhile the Bank of England reduced its economic growth forecasts. That sent the British FTSE 100 index 0.9 percent higher, however, as investors were glad the bank probably won’t raise interest rates any time soon. The pound also fell.
The yield on the 10-year Treasury note fell to 2.22 percent from 2.27 percent. That sent interest rates lower, which cuts into the profits banks can make on mortgages and other loans.