Stocks fall, led by tech shares

Los Angeles Times - - BUSINESS BEAT -

A steep slide in tech­nol­ogy firms pulled U.S. stocks lower Thursday, eras­ing gains from Wed­nes­day.

In­vestors sold big-div­i­dend stocks as bond yields rose. Banks and en­ergy stocks bucked the broader mar­ket de­cline. Crude oil prices rose for the sixth straight day.

The shift out of the tech sec­tor came as in­vestors bet cen­tral bankers may be ready to lift rates. That spurred many traders to move out of growth sec­tors, such as tech, and into value stocks, such as banks, said Erik David­son, chief in­vest­ment of­fi­cer at Wells Fargo Pri­vate Bank.

Bond prices fell. The 10year Trea­sury yield rose to 2.27% from 2.23%.

The mar­ket slide came about de­spite en­cour­ag­ing news on the U.S. econ­omy. The Com­merce Depart­ment said the na­tion’s gross do­mes­tic prod­uct grew at an an­nual rate of 1.4% in the first quar­ter. That’s bet­ter than the pre­vi­ous es­ti­mate of 1.2% and double the ini­tial es­ti­mate of 0.7%.

Semi­con­duc­tor mak­ers led the tech-sec­tor slide.

Ad­vanced Mi­cro De­vices was the big­gest loser in the Stan­dard & Poor’s 500 in­dex, drop­ping 4.8% to $12.60. Lam Re­search sank 3.7% to $142.35. Al­pha­bet went down 2.4% to $937.82. Face­book de­clined 1.4% to $151.04. Ap­ple fell 1.5% to $143.68.

All told, the tech­nol­ogy sec­tor fell 1.8%. It still leads all other sec­tors this year, with a gain of 16.5%.

Fi­nan­cial-sec­tor stocks have been mostly ris­ing this week as in­vestors bet in­ter­est rates would climb.

Bank stocks also got a boost from the Fed­eral Re­serve. The cen­tral bank said late Wed­nes­day that 34 of the big­gest U.S. banks can buy back more stock and raise their div­i­dends be­cause their bal­ance sheets are strong enough to bear a ma­jor eco­nomic down­turn.

Cit­i­group rose 2.8% to $66.98. Re­gions Fi­nan­cial jumped 4% to $14.66. Bank of Amer­ica rose 1.8% to $24.32.

Acu­ity Brands jumped 10.5% to $198.52 af­ter the light­ing com­pany’s lat­est quar­terly earn­ings and sales beat ex­pec­ta­tions. The stock was the big­gest gainer in the S&P 500 in­dex.

Sta­ples rose 1.5% to $10.08 af­ter pri­vate eq­uity firm Sycamore Part­ners agreed to buy the of­fice sup­plies chain for $6.9 bil­lion.

Rite Aid slumped 26.5% to $2.89 af­ter Wal­greens Boots Al­liance aban­doned a bid to buy the ri­val drug­store chain fol­low­ing re­sis­tance from U.S. reg­u­la­tors. Wal­greens will now buy more than 2,000 stores, three dis­tri­bu­tion cen­ters and in­ven­tory in a new deal.

Wal­greens rose 1.7% to $78.37. The ter­mi­na­tion of the Rite Aid buy­out can­celed a re­lated as­set deal in­volv­ing Fred’s Phar­macy. Fred’s shares slid 22.8% to $9.51.

Oil prices fin­ished higher. Bench­mark U.S. crude rose 19 cents to set­tle at $44.93 a bar­rel. Brent crude, the in­ter­na­tional stan­dard, rose 9 cents to $47.63. Whole­sale gaso­line held steady at $1.48 a gal­lon. Heat­ing oil rose 1 cent to $1.45 a gal­lon. Nat­u­ral gas fell 5 cents to $3.04 per 1,000 cu­bic feet.

Gold fell $3.30 to $1,245.80 an ounce. Sil­ver fell 14 cents to $16.65 an ounce. Cop­per rose 2 cents to $2.70 a pound.

The dol­lar fell to 112.07 yen from 112.28 yen. The euro rose to $1.1432 from $1.1382.

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