Industrials, energy weigh down markets
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.”
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.
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.”
A slide in industrials stocks weighed heaviest on the market Thursday. Boeing had its worst day since September 2016. The stock lost $10.85, or 3.1 percent, to $340.16. General Electric declined 58 cents, or 3.3 percent, to $16.77.
Alcoa tumbled 7 percent after the company reported a wider loss in the fourth quarter. Alcoa said it will freeze its pension and move some employees to a defined contribution retirement plan starting in 2021 as it looks to cut costs. The stock lost $3.99 to $53.