Stocks mixed as tech slumps; dollar weakens
U.S. stocks bounced up and down and finished mostly lower Wednesday as technology companies slumped. Commerce Secretary Wilbur Ross discussed a more nationalist trade stance, with uncertain effects for the market. The dollar, already at three-year lows, got even weaker.
Stocks got off to a strong start, but tech firms took heavier losses as the day wore on, led by chip makers after Texas Instruments gave a disappointing forecast. Apple also fell.
The dollar fell against other currencies after Treasury Secretary Steven T. Mnuchin said the dollar’s decline is good for U.S. exporters, suggesting he isn’t likely to try to stop its slide. Airlines sank after United Continental said it plans to ramp up passenger capacity.
Mnuchin and Ross are at the World Economic Forum in Davos, Switzerland. Mnuchin’s comments sent the price of gold and silver higher, as investors often buy precious metals when they’re concerned about inflation or softness in the dollar. Weakness in the dollar usually helps firms that export a lot of goods from the U.S., but it can hurt smaller, more domestic-focused firms by driving up the costs of imported components.
Investors have focused on global trade issues the last few days. On Tuesday, the administration placed tariffs on imported solar power components and washing machines. On Wednesday, Ross said the U.S. is fighting back against countries that have taken advantage of trade deals.
European stocks slid.
Back in the U.S., Texas Instruments fell 8.5% to $109.70 after a disappointing revenue forecast for the current quarter. Its competitor Applied Materials declined 1.5% to $56.91, and Nvidia fell 1.3% to $235.80.
Chip makers have made huge gains in recent months. Citi Investment Research analyst Christopher Danely said business conditions for chip makers are weakening after a run of strong results.
United Continental dived 11.4% to $69.05 after it said it’s planning more aggressive growth. It’s aiming to increase its passenger-carrying capacity by 4% to 6% a year through 2020. United has done better recently at handling competition with lower-cost carriers, but investors worried that more flights will mean reduced prices and hurt its profits.
The dollar slid to 109.05 yen from 110.30 yen. The euro rose to $1.2405 from $1.2294. The ICE U.S. dollar index fell almost 10% in 2017 and is down 3% so far this year.
Gold climbed $19.60, or 1.5%, to $1,356.30 an ounce. Silver rose 58 cents, or 3.4%, to $17.49 an ounce. Copper rose 12 cents, or 3.8%, to $3.23 a pound.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.64% from 2.62%.
Appliance maker Whirlpool, which gets most of its revenue overseas, continued to rally — rising 4.1% to $178.97 — as the falling dollar could boost its sales and aid its earnings.
Benchmark U.S. crude rose $1.14, or 1.8%, to $65.61 a barrel. Brent crude rose 57 cents to $70.53 a barrel. Wholesale gasoline rose 1 cent to $1.92 a gallon. Heating oil ticked up 2 cents to $2.11 a gallon. Natural gas rose 7 cents to $3.51 per 1,000 cubic feet.