Trade jitters cause choppy day for stocks
Major U.S. stock indexes closed slightly lower Thursday after a day of mostly choppy trading, wiping out some of the market’s gains from a day earlier.
Technology stocks took some of the worst losses. Fast-food chains and other consumer-focused companies, utilities and banks also declined, outweighing gains in energy and industrial stocks. Small-company stocks fared better than the rest of the market.
The indexes veered solidly into the red by late afternoon ahead of a new round of trade talks between the U.S. and China. The countries have threatened tariffs on each other.
“Now that we’re making it out of earnings season, geopolitical is going to come back into the forefront of what the market’s concerns are,” said Shawn Cruz, manager of trader strategy at TD Ameritrade. “And that may continue to drive intraday volatility until we get more certainty as far as what is actually going to come out of these trade talks.”
The Russell 2000 index of smaller-company stocks bucked the downward trend, setting an all-time high for the second day in a row. Small-cap companies tend to be more focused on business in the U.S., rather than overseas, which may make them more attractive to investors worried about a trade war or rising interest rates.
The Trump administration was scheduled to resume talks in Washington with senior Chinese officials seeking to ward off a trade war between the world’s two biggest economies. But while fielding questions from reporters Thursday afternoon, Trump suggested the negotiations may not end up averting a trade war with China: “Will that be successful? I tend to doubt it,” Trump said.
Investors took note of the remarks, and the market indexes moved lower after spending much of the day wavering between small gains and losses.
The latest quarterly results and outlooks from several companies also put investors in a selling mood.
J.C. Penney sank 12.4 percent to $2.69 after the department store chain said it might take a loss in 2018 as it cut its annual forecast. Jack in the Box lost 8.3 percent to $83.79 after the burger chain’s earnings fell short of analysts’ expectations.
Cisco Systems led a slide in technology stocks after the seller of routers, switches and software’s latest quarterly results disappointed traders.
Dillard’s bucked the trend with earnings that exceeded Wall Street’s estimates. The department store chain climbed 6.3 percent to $76.53.
An early rally in crude oil faded by late afternoon. Benchmark U.S. crude oil ended flat at $71.49 a barrel in New York. Brent crude, used to price international oil, rose 2 cents to close at $79.30 a barrel in London. It had been briefly above $80 a barrel, its highest level since November 2014.