The Middletown Press (Middletown, CT)
Financial companies lead U.S. stocks lower
Banks and other financial companies led U.S. stocks modestly lower Thursday, wiping out much of the market’s gains from a day earlier.
Phone companies, real estate, utilities and health care stocks eked out gains. Energy, technology and other stocks that posted big gains in the weeks after the November election lost ground. Hess slumped 4.8 percent and chipmaker Micron Technology fell 2.1 percent.
Banks, which moved sharply higher through much of the postelection rally in November and December, were hurt by a drop in bond yields, which can push down interest rates on loans, squeezing banks’ profits.
“The market has been running pretty nicely this year, so this is just a little bit of a pullback, a little bit of a consolidation,” said Troy Logan, managing director at Warren Financial Service. “Anything that has run well postelection has pulled back somewhat today.”
The Dow Jones industrial average slid 63.28 points, or 0.3 percent, to 19,891. The average had briefly been down more than 183 points. The Standard & Poor’s 500 index lost 4.88 points, or 0.2 percent, to 2,270.44. The Nasdaq composite snapped a seven-day winning streak that delivered five consecutive record highs. On Thursday, the index fell 16.16 points, or 0.3 percent, to 5,547.49.
The market’s slide came as investors looked ahead to several weeks of companies reporting their latest quarterly results. That begins Friday, when several major banks are due to report earnings, including Bank of America, JPMorgan Chase and Wells Fargo.
The latest drop in bond yields weighed on bank stocks Thursday. The yield on the 10-year Treasury slipped to 2.36 percent from 2.37 percent late Wednesday.
Beyond that, some traders may have also been selling bank stocks to lock in the sector’s recent gains ahead of Friday’s earnings releases, Logan said.
Energy futures closed higher. Benchmark crude oil rose 76 cents, or 1.5 percent, to close at $53.01 a barrel in New York. Brent crude, which is used to price oil sold internationally, added 91 cents, or 1.7 percent, to close at $56.01 a barrel in London.