Technology firms lead stocks lower
Technology stocks led a broad slide in U.S. stocks Tuesday after a day of mostly choppy trading.
Phone and utilities companies were among the big decliners after a sell-off in bonds sent yields sharply higher. Banks bucked the decline amid heightened expectations of rising interest rates. Oil prices rose for the fourth straight day.
Investors were in a selling mood, especially after Republican leaders in the Senate decided to delay a vote on a healthcare overhaul bill.
The delay exacerbated “worries that some of this political noise can complicate the chance of possible tax reform, healthcare reform and other policy measures that could boost the economy,” said Sean Lynch, co-head of global equity strategy at the Wells Fargo Investment Institute.
Bond prices fell. The 10year Treasury yield rose to 2.20% from Monday’s 2.13%.
The bond sell-off was triggered by remarks from European Central Bank President Mario Draghi, who expressed optimism over the future of the 19country Eurozone’s economy. Draghi did not say the ECB was ready to rein in its stimulus measures, but investors took his remarks as a hint that a change of policy could come in the next few months.
The dollar rose to 112.15 yen from 111.89 yen. The euro rose to $1.1347 from $1.1181.
Investors also weighed new data on U.S. home prices and consumer confidence. The S&P’s CoreLogic Case-Shiller 20-city home price index shows home prices climbed 5.7% nationwide in April. Separately, the Conference Board reported that its consumer confidence index rose to 118.9 this month from 117.6 in May.
Technology companies were among the biggest decliners. Computer memory maker Seagate Technology slid 6.8% to $39.51, and semiconductor manufacturer Advanced Micro Devices declined 4.8% to $13.40. Netflix fell 4.1%, to $151.03.
Darden Restaurants climbed 2.9% to $92.69 after the owner of Olive Garden reported better-than-expected earnings.
Sprint rose 2.1% to $8.18 after a report suggested that the mobile phone company is in talks with Charter Communications and Comcast on a deal that could enable the cable operators to buy a stake in Sprint. Charter fell 0.8% to $329.87. Comcast fell 0.9% to $39.25.
Benchmark U.S. crude rose 2% to $44.24 a barrel. Brent crude rose 1.8% to $46.65 a barrel. Wholesale gasoline rose 2 cents to $1.46 a gallon. Heating oil rose 3 cents to $1.41 a gallon. Natural gas rose a penny to $3.04 per 1,000 cubic feet.
Gold inched up 50 cents to settle at $1,246.90 an ounce. Silver rose 2 cents to $16.59 an ounce. Copper rose 2 cents to $2.65 a pound.