Stocks, energy prices dip
European stocks fall after report that European Central Bank will cut back on stimulus programs.
U.S. stocks finished barely lower Friday as energy companies fell with oil prices and a 10-day rally for technology companies came to an end. But Wall Street mostly avoided the sharp losses that hit European stocks.
The price of U.S. crude oil fell 2.5 percent and pulled energy stocks lower. Technology companies slipped, ending their longest winning streak in more than two years.
Investors bought government bonds in the U.S. and Europe, which sent prices higher and yields lower. With yields down, investors who wanted income bought shares in companies that pay big dividends, such as utilities and household goods makers.
European stocks took sharp losses after Reuters reported that the European Central Bank will consider paring back its stimulus programs in late October. Indexes in France, Germany and Italy all fell, and so did the blue chip Euro Stoxx 50 index.
“Europe is the economy that makes people the most nervous,” said JJ Kinahan, chief market strategist at TD Ameritrade. “It’s one that is still being treated with caution.”
The Standard & Poor’s 500 index shipped 0.91 of a point to 2,472.54. The Dow Jones industrial average dipped 31.71 points, or 0.1 percent, to 21,580.07. Earlier it shed as many as 108 points. The Nasdaq composite lost 2.25 points to 6,387.75. The Russell 2000 index of smaller-company stocks sank 6.52 points, or 0.5 percent, to 1,435.84. Still, all four indexes remain near record highs.
General Electric skidded after it disappointed investors by saying it expects to reach only the low end of its annual profit forecast range. GE said its power unit struggled in the second quarter and low oil prices are also hurting its business.
The stock fell 78 cents, or 2.9 percent, to $25.91. It’s down 18 percent this year. Also falling was oilfield services company Baker Hughes, which is combined with GE’s oil and gas unit this month and is now mostly owned by GE. It shed 85 cents, or 2.4 percent, to $34.12.
Baker Hughes was one of a horde of energy companies that fell with oil prices. Benchmark U.S. crude lost $1.15 to $45.77 a barrel in New York. Brent crude, the standard for international oil prices, shed $1.24, or 2.5 percent, to $48.06 a barrel in London.