Industrial firms pull down stocks
Boeing, General Electric and other big industrial companies weighed on U.S. stocks Thursday, pulling the major U.S. indexes down from the record highs they set the day before.
Energy stocks contributed to the modest decline following a slide in crude oil prices. Technology firms had the biggest gains. Bond yields climbed to their highest level since March as demand for bonds waned.
The market’s fall from its latest highs represents “just a little setback,” said Craig Callahan, chief investment officer at Icon Advisers.
Investors kept an eye on company earnings news and on developments in Washington ahead of a possible federal government shutdown this weekend.
A government shutdown could have a negative effect on consumer spending and financial conditions, though it’s unlikely to cause lasting or broad damage to the economy, Credit Suisse economists concluded.
But it could sap some of the momentum that helped drive the stock market to new highs this week, said J.J. Kinahan, chief market strategist at TD Ameritrade.
Bond prices fell. The yield on the 10-year Treasury climbed to 2.63% from 2.59%.
“You’re in a little bit of a tough spot with bonds,” Kinahan said. “Do you want to buy bonds of a government that’s shut down? Yet you want to go for bonds whenever you’re looking for protection, and the last time the government shut down, bonds actually rallied.”
A slide in industrial stocks weighed heaviest on the market Thursday. Boeing had its worst day since September 2016, falling 3.1% to $340.16. General Electric dropped 3.3% to $16.77. Alcoa fell 7% to $53 after reporting a wider quarterly loss.
Several banks reported quarterly results. Morgan Stanley shares rose 0.9% to $55.84 after its earnings beat expectations. Bank of New York Mellon’s and KeyCorp’s results disappointed. Bank of New York Mellon shares slid 4.4% to $55.35, and KeyCorp fell 2.1% to $20.82.
Tech stocks rose. Advanced Micro Devices ticked up 2.4% to $12.47.
Traders welcomed news that Wyndham Worldwide agreed to buy La Quinta’s hotel franchise and management business. Wyndham climbed 4.8% to $122.73, and La Quinta rose 3.8% to $20.18.
A decline in oil prices weighed on energy-sector stocks. Baker Hughes slid 4.3% to $34.74.
Benchmark crude fell 2 cents to $63.95 a barrel. Brent crude fell 7 cents to $69.31 a barrel.
Bitcoin recouped some recent losses. The digital currency rose 2.9% to $11,462, according to tracking site CoinDesk. Bitcoin futures on the Chicago Board Options Exchanges’ Futures Exchange rose 8.7% to $11,765.