Weak earnings pull down stocks
Rising bond yields and a string of weak company reports and forecasts pushed stocks lower Wednesday as major indexes retreated from their recent record highs. Industrial and technology companies and banks fared the worst.
Companies including telecom giant AT&T, aerospace company Boeing, chip maker Advanced Micro Devices and credit card issuer Discover Financial Services all gave shaky results, disappointing forecasts or both.
The Standard & Poor’s 500 index shed 11.98 points to 2,557.15. The Dow Jones industrial average fell 112.30 points to 23,329.46. The Nasdaq composite sank 34.54 points to 6,563.89. The Russell 2000 index, which is composed of smaller-company stocks, dropped 6.94 points to 1,493.48.
Bond yields jumped to seven-month highs after a report from the Commerce Department showed orders for long-lasting manufactured goods and business investment rose 2.2% in September, much more than analysts expected. Much of the improvement came from greater sales of commercial aircraft.
Despite gains in aircraft sales, a solid third-quarter report and a boost in its profit forecast, Boeing’s stock slumped $7.58, or 2.8%, to $258.42 on Wednesday. It has almost doubled in value in the last 12 months.
Advanced Micro Devices dropped $1.92, or 13.5%, to $12.33 after its fourth-quarter forecasts disappointed investors.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.44% from 2.42%.
AT&T lost $1.37, or 3.9%, to $33.49 after it reported a smaller profit and less revenue than Wall Street expected in the third quarter.
Discover Financial Services lost $2.24, or 3.3%, to $65.15 as the credit card issuer and lender set aside more money to cover potential losses on bad loans.
Benchmark U.S. crude shed 29 cents to $52.18 a barrel in New York. Brent crude rose 11 cents to $58.44 per barrel in London.
Wholesale gasoline rose 2 cents to $1.73 a gallon. Heating oil remained at $1.82 a gallon. Natural gas fell 6 cents to $2.92 per 1,000 cubic feet.
Gold inched up 70 cents to $1,279 an ounce. Silver lost 4 cents to $16.93 an ounce. Copper fell 2 cents to $3.18 a pound.
The dollar rose to 113.72 yen from 113.58 yen. The euro edged up to $1.1807 from $1.1788. The British pound rose to $1.3255 from $1.3136.
Britain’s FTSE 100 slipped 1.1%. France’s CAC 40 fell 0.4% and the DAX in Germany lost 0.5%.
The Nikkei 225 index fell 0.5% as a 16-day winning streak for Japanese stocks came to an end. The South Korean Kospi added 0.1%, and Hong Kong’s Hang Seng gained 0.5%.