Weak tech, bank stocks pull indexes back from record highs
NEW YORK (AP) – Falling technology and financial stocks pulled US indexes back from the edge of record highs on Friday. Bond yields gave up some of their big gains from the last few days, and the dollar downshifted from its sharp climb against other currencies.
The Standard & Poor’s 500 index fell 3.96 points, or 0.2 percent, to 2,258.07. It had wobbled up and down through the day, never rising by more than 0.3 percent or falling by more than 0.3 percent.
The Dow Jones industrial average fell 8.83 points, or less than 0.1 percent, to 19,843.41. The Nasdaq composite fell 19.69, or 0.4 percent, to 5,437.16 after climbing above its record closing level earlier in the day. All three indexes remain within one percent of their record highs.
Friday’s moves close a week where stocks slowed their sharp ascent since last month’s presidential election, and bond yields and the dollar continued their big gains. A driving force was the Federal Reserve’s move on Wednesday to raise interest rates for only the second time in a decade and indicate several more increases may be in store for 2017.
The dollar gave back a smidgen of its gains on Friday. The ICE US Dollar index, which measures the dollar against six other currencies, dipped 0.2 percent. The index remains close to its highest level in 14 years.
The yield on the 10-year Treasury likewise regressed a bit Friday, dipping to 2.59 percent from 2.60 percent late Thursday. It’s still near its highest level since 2014.
Friday’s drop in yields helped drive stocks that pay big dividends higher. They often trade in the opposite direction of interest rates on expectations that income investors will buy them when bond yields are dropping. Those sectors had struggled in recent days.
Utility stocks and real- estate investment trusts both rose 1.2 percent on Friday, the largest gains among the 11 sectors that make up the S&P 500.
Banks and other financial stocks fell in a rare off-day. The sector has been cruising since last month’s election on expectations that higher interest rates will boost their profits.
Financial stocks in the S&P 500 fell 0.9 percent. Bank of America fell 50 cents, or 2.2 percent, to $22.66, and Regions Financial fell 32 cents, or 2.2 percent, to $14.20.
Technology stocks in the S&P 500 fell 0.8 percent. Software giant Oracle fell $1.76, or 4.3 percent, to $39.10 after reporting revenue for its latest quarter that fell short of analysts’ expectations.
Despite drops for the S&P 500 and other indexes, more stocks rose on the New York Stock Exchange than fell.
Among them was Chipotle Mexican Grill, which jumped $9.72, or 2.5 percent, to $392.07. The restaurant chain said four new directors will join its board as part of an agreement with activist investor Bill Ackman’s Pershing Square.
Jabil Circuit rose $2.58, or 12 percent, to $24.15 after reporting stronger earnings for its latest quarter than analysts expected.
Big gains since last month’s election mean stocks generally are more expensive relative to their earnings, a key gauge investors use to measure whether the market is overpriced.