Northwest Arkansas Democrat-Gazette
Stocks down as banks slide again
NEW YORK — U.S. stock indexes edged lower for the second day in a row Wednesday as a sharp drop for banks and a rare loss for technology companies canceled out gains for drugmakers and consumerfocused companies.
The Standard & Poor’s 500 index fell 1.11 points, or less than 0.1 percent, to 2,411.80. The Dow Jones industrial average dropped 20.82 points, or 0.1 percent, to 21,008.65. The Nasdaq composite fell 4.67 points, or 0.1 percent, to 6,198.52. The Russell 2000 index of small-company stocks slipped 0.99 point, or 0.1 percent, to 1,370.21.
Banks fell hard as executives from JPMorgan Chase and Bank of America said their trading businesses are having a rough second quarter. An eight-day winning streak for technology companies ended, and energy companies fell with oil prices. Investors picked consumer-focused companies, drugmakers, and high-dividend utilities and household-goods companies. The New York Stock Exchange was evenly split between gainers and losers.
“The stock market has been strong and all the while bond yields have dropped during the year,” signaling caution about the economy, said Brent Schutte, chief investment strategist for Northwestern Mutual Management. “In the next couple of months, we’re going to solve which is right: the bond market or the stock market.”
Banks skidded Tuesday as bond yields dropped, which hurts banks by forcing down interest rates on loans. Yields were little changed Wednesday, but financial firms fell again as investors worried that banks’ revenue from trading stocks, bonds and currencies is going to weaken in the second quarter.
At a financial industry conference in New York, Marianne Lake, JPMorgan’s chief financial officer, said the lender’s trading revenue is down about 15 percent this quarter because of a drop in fixedincome trading. At a different industry event Wednesday, Bank of America CEO Brian Moynihan said second-quarter trading revenue will fall 10 percent compared with a year ago.
The banking industry had an outstanding first quarter, and trading was a key reason. JPMorgan shares fell $1.75, or 2.1 percent, to $82.15 on Wednesday, and Bank of America fell 43 cents, or 1.9 percent, to $22.41. Capital One slumped $1.36, or 1.7 percent, to $76.92. Goldman Sachs, which saw its vaunted trading business hit a speed bump in the first quarter, gave up $7.16, or 3.3 percent, to $211.26.
Bond prices were little changed. The yield on the 10-year Treasury note remained at 2.21 percent.
Technology companies turned lower. Apple and Facebook are up 32 percent this year, and Alphabet is up 25 percent. All three slid Wednesday.
Pfizer rose 52 cents, or 1.6 percent, to $32.65. Irish drugmaker Perrigo climbed $4.93, or 7.3 percent, to $72.85 after its first-quarter report was better than expected. Health care products maker Johnson & Johnson advanced $1.14, or 0.9 percent, to $128.25.
Benchmark U.S. crude fell $1.34, or 2.7 percent, to $48.32 a barrel in New York. Brent crude, the standard for international oil prices, fell $1.53, or 3 percent, to $50.31 a barrel in London.