The News Herald (Willoughby, OH)
Indexes weighed down by industrials, energy
Losses among big companies weighed on stocks, pulling the market below the record highs it set the day before.
Losses among Boeing, General Electric and other big industrial companies weighed on U.S. stocks Thursday, pulling the market below the record highs it set the day before.
Energy stocks contributed to the modest decline following a slide in crude oil prices. Technology companies accounted for the biggest gains. Bond yields climbed to their highest level since March as demand for bonds waned.
Investors kept an eye on the latest company earnings news while also monitoring developments in Washington ahead of a possible federal government shutdown this weekend.
The market’s dip from its latest highs represents “just a little setback,” said Craig Callahan, chief investment officer at ICON Advisers. “We’re still bullish and expect the market to move higher over the next year.”
The Standard & Poor’s 500 index fell 4.53 points, or 0.2 percent, to 2,798.03. The Dow Jones industrial average lost 97.84 points, or 0.4 percent, to 26,017.81. The Nasdaq slid 2.23 points, or 0.03 percent, to 7,296.05. The Russell 2000 index of smaller-company stocks gave up 9.93 points, or 0.6 percent, to 1,576.73.
Losers outnumbered winners by almost three to one. Trading in declining stocks also was more than twice as heavy as it was in shares that rose.
The major indexes, which hit record highs Wednesday, wavered between small gains and losses for much of the day as investors continued to size up company earnings and economic data.
The Commerce Department said Thursday that groun breakings on new U.S. homes declined in December to a seasonally adjusted annual rate of 1.19 million units. The drop was a reversal from robust gains for October and November.
Traders also kept tabs on Washington, where Republicans and Democrats scrambled to avert a possible federal government shutdown before a midnight Friday deadline.
Republicans were trying to pass a funding bill that would prevent the shutdown of federal agencies, but Democrats threatened to vote against the bill unless the White House and GOP lawmakers include protections for younger immigrants who were brought to the U.S. illegally as children.
A shutdown could have a negative impact on consumer spending and financial conditions, though it’s unlikely that it would cause lasting or broad damage to the economy, Credit Suisse economists concluded in a note published Thursday.
As for the Wall Street impact, a shutdown could sap some of the momentum that helped drive the stock market to new highs this week, said J.J. Kinahan, chief market strategist at TD Ameritrade.
“If you’re going to shut down the government right after that, it’s really the kind of thing that would just suck the confidence out of the market overall.”
Bond prices fell. The yield on the 10-year Treasury climbed to 2.63 percent from 2.59 percent late Wednesday.
“You’re in a little bit of a tough spot with bonds,” said Kinahan. “Do you want to buy bonds of a government that’s shut down? Yet you want to go for bonds whenever you’re looking for protection, and the last time the government shut down, bonds actually rallied.”