Stocks waver as energy companies droop
NEW YORK — Technology and energy companies skidded Friday while banks and insurers recovered some of their recent losses, leaving major U.S. indexes little changed on the day and moderately lower for the week.
Energy companies fell as benchmark U.S. crude skidded $1.61, or 3.3 percent, to $47.48 a barrel in New York. Hurricane Irma threatened to slash energy demand that had only just begun to recover from the wrath of Harvey.
Florida burns more gasoline than any other state except California and Texas.
Uncertainty has traders “pulling in their horns ahead of the storm,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “They are worried about demand destruction.”
Credit monitoring company Equifax plunged after it disclosed a data breach that affects 143 million Americans. Competitors TransUnion and Experian also fell, while data security companies like Symantec jumped as investors expected they will get more business.
Grocery stores and food companies slumped as Kroger said stiff competition forced it to cut prices. Target also said it is lowering prices.
Technology companies including Apple, Facebook, Intel and chipmakers weakened.
Hurricane Irma continued to devastate islands in the Caribbean. Irma is expected to hit Florida over the weekend with winds surpassing 130 mph.
Experts think the storms will slow down U.S. economic growth in the third quarter. While that’s likely to be temporary, David Chalupnik, head of equities at Nuveen Asset Management, said the effect on the stock market could linger because it will be hard for investors to tell how much of any individual company’s problems are caused by the weather.
“The next couple of months are going to be pretty cloudy,” Chalupnik said. He said insurance companies, cruise lines, and oil refiners based in the Gulf Coast or Southeast could take losses and bad debt at credit card companies will increase, and since the storm will push the Federal Reserve to keep interest rates lower for a bit longer, that will hurt banks by keeping interest rates low on loans.
Grocery chain Kroger said intense competition with Target and Wal-Mart forced it to cut prices in the second quarter, which hurt its profits. Making matters worse, after the quarter ended Amazon.com completed its purchase of Whole Foods and immediately cut prices on many items. Kroger didn’t change its annual forecast, but that projection doesn’t account for the hurricanes, which may hurt its sales.
Natural disasters affected markets outside the U.S. as well. Mexico’s Bolsa stock index fell 0.7 percent after a powerful earthquake hit near the southern coast.