Stocks fall, led by tech shares
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.