The Denver Post

Energy, tech companies help pull U.S. stocks broadly lower

- By Alex Veiga

NEW YORK» Energy stocks led a broad slide on Wall Street on Thursday as oil and gas prices fell, handing the market its second consecutiv­e loss.

Losses in technology and communicat­ions stocks also helped power the sell-off, offsetting gains in health care and real estate companies. Banks also rose, getting a boost from rising bond yields, which allow lenders to charge higher interest on loans.

The market’s downward tilt came as investors continued to weigh remarks on Wednesday by the head of the Federal Reserve that appeared to dim prospects for an interest rate cut this year.

“You got a continuati­on of what you saw yesterday,” said Willie Delwiche, an investment strategist at Baird. “You saw stock market weakness, you saw bond yields rising and you saw the Fed funds futures continuing to shift away from pricing in a rate cut in the near future.”

The S&P 500 index fell 6.21 points, or 0.2 percent, to 2,917.52. The Dow Jones industrial average dropped 122.35 points, or 0.5 percent, to 26,307.79. The Nasdaq composite, which is heavily weighted with technology companies, slid 12.87 points, or 0.2 percent, to 8,036.77.

Smaller company stocks fared better. The Russell 2000 index rose 6.27 points, or 0.4 percent, to 1,582.65.

Major indexes in Europe finished mostly lower.

The S&P 500 index is up 16.4 percent for the year and notched three consecutiv­e all-time highs before finishing lower Wednesday after the remarks by Federal Reserve Chair Jay Powell.

In those remarks, Powell played down the possibilit­y of an interest rate cut this year and restated the central bank’s message that there will likely be no rate hikes in 2019.

Those comments made it seem like investors had a “less supportive Fed” than they anticipate­d, said Brad McMillan, chief investment officer for Commonweal­th Financial Network. McMillan noted that a pullback in stocks was likely because they have been gaining so much over the last few weeks.

“We ran up to new highs again, and I think the markets are getting a little bit nervous about that,” he said.

The U.S. stock market has been riding high this year as it’s made its way back from a nosedive at the end of 2018. The Fed spurred the market’s recovery earlier this year when it signaled that it would take a patient approach to raising interest rates.

A slide in crude oil prices Thursday helped drag down energy stocks. The sector fell 1.7 percent, more than triple the declines in the technology and communicat­ions sectors.

Benchmark U.S. crude fell 2.8 percent to settle at $61.81 per barrel. Brent crude, the internatio­nal standard, dropped 2 percent to close at $70.75.

Marathon Oil dropped 6.1 percent after the company reported revenue that fell short of estimates.

Technology stocks, the biggest gainers this year, also weighed on the market. Cognizant Technology Solutions led the sector’s decliners, losing 7.7 percent. Microsoft fell 1.3 percent.

Among media companies, Fox Corp. and Discovery Inc. each fell more than 5 percent.

Investors were treated to a mostly mixed batch of corporate earnings reports Thursday.

Fluor was the biggest loser in the S&P 500. The engineerin­g and constructi­on company plunged 24.1 percent after it reported a huge quarterly loss and issued an earnings forecast that was far below what analysts were expecting.

Sports apparel company Under Armour gained 3.5 percent after it reported first-quarter results that beat Wall Street forecasts. It also raised its profit forecast for 2019.

Online games maker Zynga climbed 5.6 percent after raising its revenue forecast for the year.

Earnings reporting season is more than a third of the way through, and the results have been better than investors had expected. Analysts had been predicting a slump in profits, and their worst fears have not materializ­ed.

Bond prices fell. The yield on the 10-year Treasury note, which influences mortgages and some other loans, rose to 2.54 percent from 2.51 percent late Wednesday.

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