The Morning Journal (Lorain, OH)
Stocks close mixed; Dow ends losing streak
A late round of buying erased early losses on Wall Street, leaving major indexes mixed at the close of trading.
NEW YORK » A late round of buying erased early losses on Wall Street, leaving major indexes mixed at the close of trading. Bigger companies managed to eke out modest gains, while smaller companies mostly fell.
A big gain in Boeing pushed the Dow Jones industrial average higher, breaking a five-day losing streak. Late in the day, energy companies got a boost after Exxon Mobil said it is raising its quarterly dividend.
Stocks got off to a weak start as investors worried that growing costs for raw materials along with rising interest rates would hold back profit growth for U.S. companies. Defense contractors stumbled following first-quarter reports from Northrop Grumman and General Dynamics.
U.S. bond yields rose again and set four-year highs while oil prices, already at three-year highs, continued to move higher.
Stocks had tumbled on Tuesday after companies including Caterpillar, 3M and Sherwin-Williams said they seeing higher costs. Caterpillar also said it doesn’t expect to top its first-quarter earnings for the rest of this year.
On Wednesday Goodyear Tire & Rubber said higher raw materials costs and weaker demand hurt its business in the first quarter. Its stock fell 5.1 percent to $25.51.
Invesco Chief Global Market Strategist Kristina Hooper said investors are starting to worry that the market’s best days are behind it. She noted that wages are rising, as unemployment has been at multi-decade lows for the last few years. That means costs for companies are up. Oil prices have also jumped and investors are worried that new tariffs will also drive up costs and affect company earnings in the months to come.
“I wouldn’t be surprised if earnings peaked by the end of this year, but certainly they haven’t peaked yet,” she said.
The S&P 500 index added 4.84 points, or 0.2 percent, to 2,639.40. The Dow rose 59.70 points, or 0.2 percent, at 24,083.83. The losing streak was its longest in more than a year.
The Nasdaq composite dipped 3.61 points, or 0.1 percent, to 7,003.74. The Russell 2000 index of smaller-company stocks lost 2.81 points, or 0.2 percent, to 1,550.47. Most stocks on the New York Stock Exchange fell.
Investors expected strong profit growth this year thanks to the growing global economy and the corporate tax cut President Donald Trump signed at the end of 2017. That optimism helped send stocks to record highs in January. Now investors are worrying about whether that growth will show up.
Aerospace company Boeing topped Wall Street’s estimates in the first quarter and raised its forecasts for the year. Its stock gained 4.2 percent to $342.86 and railroad operator Norfolk Southern climbed 8.1 percent to $145.96 after it, too, surpassed analyst projections.