Stocks finish lower; tech companies fall

Associated Press

NEW YORK — After a wobbly day of trading, U.S. stocks fell for the seventh time in eight days Monday as technology companies continued to slide. Industrial and high-dividend companies rose, and the market’s losses were limited relative to the steep losses it suffered last week.

Stocks opened lower and repeatedly switched between small gains and losses before falling in the last hour of trading. Along with technology companies, health care and energy stocks and retailers also fell as the companies that have led the U.S. market higher this year continued to struggle.

Defense contractors L3 and Harris made the biggest gains on the S&P 500 after announcing a deal to combine. Smaller companies fared better than the rest of the market and finished broadly higher.

Jason Pride, chief investment officer for private clients at Glenmede, said that investors expect many years of powerful profit growth from technology-oriented companies like Apple, Amazon and Netflix.

Over the past two weeks, Wall Street has started considering the possibility that interest rates will rise more quickly, taking a bigger chunk out of those crucial future profits.

“The more the company’s valuation is dependent on some profit way ahead in time as opposed to the profits coming today, the more rate hikes should impact the valuation of that company,” he said. Mr. Pride said the recent downturn is a healthy development for stocks.

“A 5 to 10 percent pullback of that magnitude is very normal and very reasonable for this market to go through,” he said.

The S&P 500 index lost 16.34 points, or 0.6 percent, to 2,750.79. The Dow Jones Industrial Average retreated 89.44 points, or 0.4 percent, to 25,250.55. The Nasdaq composite skidded 66.15 points, or 0.9 percent, to 7,430.74. The Russell 2000 index of smaller-company stocks added 6.42 points, or 0.4 percent, to 1,553.09.

The S&P 500 lost 4.1 percent last week, its third weekly loss in a row and its biggest since late March.

The technology companies that have led the market higher in recent years, including some of the world’s most valuable companies, continued to decline. Apple gave up 2.1 percent to $217.36 and chipmaker Nvidia slipped 3.4 percent to $235.38.

Netflix, which is scheduled to report its third-quarter results late Tuesday, fell 1.9 percent to $333.13.

It has fallen 20.5 percent since disclosing weak user growth three months ago.