Stocks lower as energy shares fall
U.S. stock indexes closed moderately lower Friday after three days of gains. Several technology stocks traded heavily, including Yahoo, Twitter and Facebook. Energy stocks fell along with a steep decline in the price of oil.
The Dow Jones industrial average sank 131.01 points, or 0.7%, to 18,261.45. The Standard & Poor’s 500 index declined 12.49 points, or 0.6%, to 2,164.69 and the Nasdaq composite index fell 33.78, or 0.6%, to 5,305.75.
Stocks posted solid gains this week, with the S&P 500 up 1.2%, as investors were relieved that the Federal Reserve decided to keep rates at their current low level. The next time that the Fed could raise rates is November, but the general impression among investors is that the central bank will not raise rates until December, long after the presidential election.
“As much as market fundamentals matter, the Fed and its decisions continue to dominate markets,” said Kristina Hooper, head of U.S. investment strategies at Allianz Global Investors.
Several technology stocks made big moves.
Facebook fell 1.6% to $127.96 after the Wall Street Journal reported that the company was overstating how long users were watching video ads.
Yahoo fell 3.1% to $42.80 after the company admitted the data of 500 million users had been stolen.
Twitter soared 21% to $22.62 after business network CNBC reported that the company is in deal talks with Salesforce and with Google’s parent company, Alphabet, for a possible sale.
Although stocks rose solidly this week, most of the gains were in the relatively safe, dividend-rich companies that investors favor when they’re uncertain about the economy.
The Dow Jones utility index was up 3.3% this week, and the new real estate component of the S&P 500, made up of mostly real estate investment trusts, rose 4.3%.
Oil prices fell sharply after reports that Saudi Arabia was unable to reach an agreement with Iran to cut production. U.S. benchmark crude oil futures fell $1.84 to $44.48 a barrel. Brent crude, used to price international oils, fell $1.76 to $45.89 a barrel.
Heating oil fell 5 cents to $1.41 a gallon. Wholesale gasoline fell 2 cents to $1.38 a gallon. Natural gas fell 3.5 cents to $2.955 per 1,000 cubic feet.
Energy companies were hit hard, and the energy component of the S&P 500 lost 1.3%, much more than the broader market. Shares of ocean rig operator Transocean sank 6% to $9.10.
Houghton Mifflin Harcourt dived 11% to $13.26 after the book publisher said Chief Executive Linda Zecher resigned.
Gold fell $3 to $1,341.70 an ounce, silver fell 29 cents to $19.81 an ounce and copper rose less than 1 cent to $2.201 a pound.
The yield on the U.S. Treasury 10-year note was little changed at 1.62%. The euro rose to $1.1231 from $1.1204 and the dollar edged up to 101.09 yen from 100.89 yen.