Daily Local News (West Chester, PA)
Late buying eases early losses
NEWYORK» Losses for health care companies and banks left U.S. stocks lower Thursday, although a late push for technology and industrial companies helped the market avoid a steeper decline.
After a weak finish the day before, the Dow Jones industrial average dropped as much as 393 points Thursday morning. Thanks to another gain in Boeing, it ended slightly higher.
Companies including insurer AIG, prescription drug distributor Cardinal Health, and music streaming service Spotify suffered big losses. Banks declined along with interest rates.
Electric car maker Tesla fell after it reported another big loss and CEO Elon Musk mocked some questions from analysts during the company’s conference call.
Microsoft and Cisco Systems helped technology companies to some modest gains. But investors haven’t found much to get excited about the last couple of days as they worry about trade tensions and the possibility that growth in company profits has peaked.
“Investors went from being very optimistic to beingmore concerned about what could happen next,” said Kate Warne, investment strategist for Edward Jones. “People are getting far ahead of themselves.”
The S&P 500 index slid 5.94 points, or 0.2 percent, to 2,629.73. The Dow rose 5.17 points to 23,390.15. The Nasdaq composite lost 12.75 points, or 0.2 percent, to 7,088.15. The Russell 2000 index
of smaller-company stocks fell 8.36 points, or 0.5 percent, to 1,546.56.
About three-fourths of S&P 500 companies had reported results as of Wednesday, according to CFRA Research, and their profits and revenues have consistently blown past Wall Street’s expectations. But the market isn’t acting like it: since April 12, the day before big
banks started reporting their results, the S&P 500 is down 1.3 percent.
“Investors looked for any and all reasons to sell the results,” wrote Lindsey Bell, investment strategist for CFRA Research. In a note to clients, Bell said that Caterpillar “crushed all hopes” that stocks would rise following earnings. The construction equipmentmaker said it doesn’t expect to top its first-quarter profit for the rest of the year.
The possibility that earnings growth was at its peak
didn’t appear to be on investors’ minds until the comments from Caterpillar executives last week. Rising costs are one challenge companies are facing, and that could be in focus again Friday after the government releases its report on job creation and wage growth.
Warne, of Edward Jones, said she still expects stocks to rise this year because of continued economic and profit growth. But she said it might take weeks or even months before that happens.