Stocks’ bumpy ride ends down
NEW YORK — U.S. stocks slid Tuesday as investors continued to sell phone company and utility shares. Energy companies rose with the price of oil, but stocks have been locked in an up-and-down pattern for more than a week.
The Dow Jones industrial average fell 84.03 points, or 0.5 percent, to 18,552.02. The Standard & Poor’s 500 index slid 12 points, or 0.6 percent, to 2,178.15. The Nasdaq composite fell 34.90 points, or 0.7 percent, to 5,227.11. Stocks have been setting records recently, but it’s been more than a week since they rose for two days in a row. The market hasn’t made many big moves over the past month.
The price of oil on Tuesday rose for the fourth day in a row to sustain a recent recovery. Metals prices also rose. The Labor Department said inflation remains low, as prices paid by consumers were unchanged in July. Most stocks were down, but for the second day in a row, the biggest losses went to traditionally safe investments such as telecommunications and utility companies. Bond prices also inched lower.
The dollar has been strong over the past few years compared with other currencies. Early this year, it looked like the dollar would stay at those elevated levels because the Federal Reserve was raising interest rates while other global central banks were cutting them to stimulate their economies. But John Canally, chief economic strategist for LPL Financial, said the Fed has changed course. By leaving interest rates where they are, it has allowed the currency to weaken a bit, aiding U.S. manufacturing and energy companies and other exporters.
The Labor Department said prices paid by consumers were unchanged in July as gas and other energy prices kept inflation down. Core inflation, which leaves out food and fuel prices, inched up just 0.1 percent for the month. Overall, inflation is up 0.8 percent over the past year. That’s far below the 2 percent target set by the Fed, and investors have concluded that means the Fed is less likely to raise interest rates soon.
Benchmark U.S. crude rose 84 cents, or 1.8 percent, to $46.58 per barrel in New York. Brent crude, a benchmark used to price international oils, rose 88 cents, or 1.8 percent, to $49.23 a barrel in London. Oil prices climbed last week after steep losses in June and July.
That aided companies such as pipeline operator Kinder Morgan, which rose 48 cents, or 2.3 percent, to $21.78. Apache Corp. added $1.09, or 2.2 percent, to $50.97.
Metals prices also rose. Gold gained $9.40 to $1,456.90 an ounce. Silver added 3 cents to $19.87 an ounce. Copper edged up 2 cents to $2.17 a pound. Bond prices dipped, and the yield on the 10-year Treasury note rose to 1.58 percent from 1.56 percent.
Stocks have wavered lately as investors review mixed reports about the U.S. economy and try to get a sense of its health. On Tuesday, the Fed said U.S. factories cranked out more automobiles, machinery and chemicals in July, which suggests manufacturers might be recovering, though growth remains little changed from a year ago and manufacturers aren’t adding many jobs. Meanwhile, the Commerce Department said the pace of home construction grew by the most since February.
Tea maker Hain Celestial Group delayed its quarterly report because of accounting issues and said it doesn’t expect to reach its financial projections for the year. The stock tumbled $14.05, or 26.3 percent, to $39.35.
Uniform maker Cintas said it will buy G&K Services, a uniform and facility services company, for $97.50 a share, or $1.93 billion. G&K Services advanced $14.57, or 17.7 percent, to $96.70, and Cintas stock gained $5.57, or 5.2 percent, to $112.99.
Beauty products maker Coty posted quarterly results that surpassed expectations but said little about its purchase of Procter & Gamble’s beauty business, a $15 billion deal expected to close in the next few months. Coty said it’s “premature” to comment on how the combined business will do. The stock skidded $1.47, or 4.9 percent, to $28.28.
TJX, the parent of T.J. Maxx, Marshalls and other stores, traded lower after saying higher wages and the strong dollar will hurt its results in the third quarter. Its stock gave up $4.80, or 5.8 percent, to $77.97.
In other energy trading, wholesale gasoline rose 2 cents to $1.42 a gallon. Heating oil picked up 1 cent to $1.46 a gallon. Natural gas gained 3 cents to $2.62 per 1,000 cubic feet.
The CAC 40 in France shed 0.8 percent, and Britain’s FTSE 100 lost 0.7 percent. Germany’s DAX fell 0.6 percent. Japan’s Nikkei 225 slid 1.6 percent as the yen gained against the U.S. dollar. South Korea’s Kospi took a 0.1 percent loss, and Hong Kong’s Hang Seng index was down 0.1 percent.