Stocks decline as energy firms slide
U.S. stocks took small losses Friday to end a quiet week of trading. Energy companies fell as a rally in oil prices faded and investors continued to sell the traditionally safer assets they favored earlier this year. Technology and materials companies made small gains.
Although U.S. oil prices rose for the seventh day in a row, investors don’t appear to expect further gains and they sold energy company shares. Bond prices fell and yields climbed.
Although stocks haven’t made many major moves this summer, there are signs investors feel comfortable enough to take bigger risks.
Karyn Cavanaugh, senior market strategist for Voya Investment Strategies, said investors recognize that central banks are keeping the stock market stable. So investors are buying more energy, materials and tech stocks instead of the utilities and telecommunications companies they turned to during the market turmoil at the start of this year.
U.S. crude rose 30 cents to $48.52 a barrel. U.S. oil has climbed 17% in its seven-day streak, but its price has stayed between $40 and $50 a barrel for about four months, and there’s an enormous glut of oil on the market. Brent crude slipped 1 cent to $50.88 a barrel. Chevron fell 1.2% to $102.32 and Exxon Mobil retreated 1.2% to $87.80.
Technology companies made small gains. Applied Materials jumped 7.1% to $29.64 after the manufacturer of chipmaking equipment disclosed new orders and a contract backlog that were much stronger than analysts had forecast. Security software maker Symantec rose 2.6% to $23.72.
Bond prices are down and yields are up after hitting record lows a month ago. On Friday the yield on the 10-year Treasury note jumped to 1.58% from 1.54%. The dollar recovered some of its recent losses, rising to 100.24 yen. The euro slipped to $1.1324 from $1.1354.
Retailers did fairly well. Foot Locker jumped 11% to $68.49 after the shoe store chain reported stronger results than analysts expected. Nike rose 3% to $58.90. Ross Stores climbed 3.5% to $65.06 after the discounter issued a strong second-quarter report and raised its profit projections.
Beauty products maker Estee Lauder skidded 3.5% to $91.73 after its profit forecast for the current quarter and the new fiscal year fell far short of estimates.
Emerson Electric agreed to buy Pentair’s valves and controls business for $3.15 billion. Emerson stock fell 3.1% to $52.98 and Pentair slid 1.1% to $65.79.
Farm equipment maker Deere leaped 13.5% to $87.32, its biggest gain since the end of 2008, after it posted strong results and raised its outlook for the year.
Wholesale gasoline rose 2 cents to $1.51 a gallon. Heating oil rose 4 cents to $1.53 a gallon. Natural gas fell 9 cents to $2.58 per 1,000 cubic feet. Gold fell $11 to $1,346.20 an ounce. Silver fell 42 cents, or 2.1%, to $19.32 an ounce. Copper remained at $2.17 a pound.