Stocks fall on earnings from Disney, others
U.S. stocks closed slightly lower Wednesday, after being down further earlier in the day following a rare batch of earnings disappointments by Walt Disney Co. and other big companies.
Consumer-focused firms, media companies and banks accounted for much of the market decline. They outweighed gains in healthcare stocks and elsewhere. Small-company stocks fell more than the rest of the market.
Investors’ unease over escalating tensions between the U.S. and North Korea weighed on stocks early in the session, pushing gold and bond prices slightly higher. But by the end of the day, traders appeared to take the geopolitical drama in stride.
Gold rose $16.70, or 1.3%, to $1,279.30 an ounce.
Bond prices rose. The yield on the 10-year Treasury note slipped to 2.25% from 2.26%.
Although the tough talk about the potential for war is scary, investors have heard it many times before.
“North Korea was fodder for the overnight trade, and as we headed into today we haven’t seen any more saber rattling,” said JJ Kinahan, chief market strategist at TD Ameritrade. “I would expect the markets to react again pretty negatively to any more tough talk from either side, but for now, everybody seems to have settled down.”
Disappointing company earnings and outlooks also put traders in a selling mood.
Priceline Group slid 6.9% to $1,906.80 after the online travel booking service issued a profit forecast that was weaker than analysts expected.
Disney dropped 3.9% to $102.83, its biggest singleday loss in more than a year, after the media giant reported a weak quarter and said it would pull its movies from Netflix and start two video streaming services of its own. Netflix fell 1.4% to $175.78.
Shares in several other big media companies also declined. Discovery Communications fell 2.9% to $23.60. Viacom fell 1.9% to $30.17.
Fossil tumbled 25.1% to $8.87 after the watch maker said sales continued to weaken, falling short of analysts’ estimates. The company booked a hefty charge and said its chief financial officer was leaving the company.
Healthcare stocks, which have been in a slump, posted gains. Humana rose 1.9% to $254.96.
Green Dot jumped 13.8% to $45.92 after the prepaid debit card firm raised its profit and revenue forecasts and gave more details about its partnership with Apple.
Benchmark U.S. crude rose 39 cents to settle at $49.56 a barrel. Brent crude, used to price international oils, rose 56 cents to $52.70. Wholesale gasoline was little changed at $1.62 a gallon, heating oil rose 2 cents to $1.65 a gallon, and natural gas rose 6 cents to $2.88 per 1,000 cubic feet.
Silver rose 47 cents, or 2.9%, to $16.86 an ounce. Copper fell 2 cents to $2.93 a pound.
The dollar fell to 109.85 yen from 110.48 yen. The euro held steady at $1.1752.