Tech gains, but in­dus­tri­als slide

The News Herald (Willoughby, OH) - - Front Page - By Mar­ley Jay

U.S. stocks were split Mon­day as tech com­pa­nies con­tin­ued to climb, but Boe­ing and other in­dus­trial com­pa­nies slid.

NEW YORK » U.S. stocks were split Mon­day as tech­nol­ogy com­pa­nies con­tin­ued to climb, but Boe­ing and other in­dus­trial com­pa­nies gave back some of the ground they won on Fri­day.

Com­pa­nies like Ap­ple and Al­pha­bet, Google’s par­ent com­pany, and chip­mak­ers in­clud­ing Mi­cron Tech­nol­ogy have led the mar­ket’s re­cov­ery in re­cent weeks. Re­tail­ers in­clud­ing Ama­zon and Star­bucks also made head­way. The mar­ket was com­ing off its big­gest gain in a month fol­low­ing the Fe­bru­ary jobs re­port, which showed strong hir­ing and mod­er­ate growth in wages.

In­fla­tion has been the mar­ket’s dom­i­nant con­cern over the last six weeks, and two more mea­sur­ing sticks of in­fla­tion will be re­ported this week as the La­bor Depart­ment dis­closes data on con­sumer prices Tues­day morn­ing and pro­ducer prices on Wed­nes­day. Prices paid by con­sumers jumped in Jan­uary and so did pro­ducer prices, which mea­sure the cost of goods be­fore they reach the con­sumer.

The Fed­eral Re­serve is grad­u­ally rais­ing in­ter­est rates to keep in­fla­tion in check, and it ex­pects to boost rates at least three times this year. JJ Ki­na­han, chief mar­ket strate­gist for TD Amer­i­trade, said in­vestors are look­ing at a lot of data but are re­ally ask­ing one ques­tion.

“If you think about the sell­offs that we’ve had, they’ve all been about ‘are we go­ing to get a fourth rate hike or aren’t we?’” he said.

The S&P 500 in­dex fell 3.55 points, or 0.1 per­cent, to 2,783.02. The Dow Jones in­dus­trial av­er­age de­clined 157.13 points, or 0.6 per­cent, to 25,178.61. Al­most all of that loss came from three in­dus­trial stocks: Boe­ing, Cater­pil­lar and United Tech­nolo­gies.

The Nas­daq com­pos­ite fin­ished at an­other record high af­ter it added 27.51 points, or 0.4 per­cent, to 7,588.32. The Rus­sell 2000 in­dex of smaller-com­pany stocks rose 3.91 points, or 0.2 per­cent, to 1,601.06.

Most of the stocks on the New York Stock Ex­change ended the day higher.

Op­ti­cal com­mu­ni­ca­tions com­pany Oclaro surged af­ter it agreed to be bought by op­ti­cal net­work­ing com­pany Lu­men­tum Hold­ings. The deal val­ues Oclaro at $9.99 a share, or $1.69 bil­lion, and its stock gained $2.16, or 27.5 per­cent, to $10.01. Lu­men­tum also rose $3.03, or 4.4 per­cent, to $72.

Late Fri­day the Wall Street Jour­nal re­ported that In­tel might try to buy ri­val Broad­com. Broad­com is try­ing to buy a third chip­maker, Qual­comm, for $117 bil­lion, and the Jour­nal said that if that deal ap­pears to be mov­ing for­ward, In­tel will con­sider re­sponses that could in­clude an at­tempt to buy Broad­com. It could also at­tempt a smaller deal.

Broad­com jumped $9.06, or 3.6 per­cent, to $262.84 while In­tel fell 67 cents, or 1.3 per­cent, to $51.52. Qual­comm gave up 22 cents to $62.81.

In­dus­trial com­pa­nies like aero­space and de­fense firms and ma­chin­ery mak­ers lost about half of what they gained dur­ing their rally Fri­day. Boe­ing shed $10.33, or 2.9 per­cent, to $344.19 and Lock­heed Martin lost $7.39, or 2.2 per­cent, to $333.10. Con­struc­tion equip­ment maker Cater­pil­lar dipped $3.75, or 2.4 per­cent, to $154.50.

In­dus­trial com­pa­nies have bounced around since President Don­ald Trump said he would or­der tar­iffs on im­ported steel and alu­minum. That will mean higher costs for com­pa­nies that use those me­tals to make ma­chin­ery, and their sales could be hurt if other com­pa­nies re­spond by plac­ing tar­iffs on goods made in the U.S.

The Fe­bru­ary jobs re­port, which came out on Fri­day, eased in­vestors’ minds and sent stocks jump­ing. The mar­ket had tum­bled in early Fe­bru­ary fol­low­ing the Jan­uary jobs re­port, which showed a sur­prise spike in hourly wages. Wall Street wor­ried that that might be the start of faster in­fla­tion, which would lead the Fed­eral Re­serve to raise in­ter­est rates more rapidly.

Higher rates slow down eco­nomic growth.



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