Stocks slip as investors sell safer picks

U.S. stocks slid Tuesday as investors continued to sell phone company and utility shares. Energy companies rose with the price of oil, but stocks have been locked in an up-and-down pattern for more than a week.

As the dollar weakened, the price of oil rose for the fourth consecutive day, sustaining a recent recovery. Metals prices also rose. The Labor Department said inflation remains low, as prices paid by consumers were unchanged in July. Most stocks were down, but for the second day in a row, the biggest losses went to traditionally safe investments such as telecom and utility companies. Bond prices also inched down.

The dollar has been very strong over the last few years compared with other currencies. Early this year it seemed the dollar would stay at those elevated levels because the Federal Reserve was raising interest rates while other global central banks were cutting rates to stimulate their nation’s economies. John Cannally, chief economic strategist for LPL Financial, said the Fed has changed course. By leaving interest rates where they are, it has allowed the dollar to weaken a bit, aiding U.S. manufacturing and energy companies and other exporters.

“The Fed is using the dollar as sort of a tool of monetary policy,” he said. “The Fed wants to give China and emerging markets time to heal and get their houses in order.”

The Dow Jones industrial average fell 84.03 points, or 0.5%, to 18,552.02. The Standard & Poor’s 500 index slid 12 points, or 0.5%, to 2,178.15. The Nasdaq composite sank 34.90 points, or 0.7%, to 5,227.11. Stocks have been setting records recently, but it’s been more than a week since they rose for two days in a row. The market hasn’t made many big moves over the last month.

The Labor Department said prices paid by consumers were unchanged in July as gas and other energy prices kept inflation down.

Read the full story: Lower gasoline prices cause inflation to slow >>

The dollar fell to 100.25 yen from 101.25 yen. The euro rose to $1.1277 from $1.1183.

The weakening dollar boosted energy and metals prices Tuesday. Benchmark U.S. crude rose 84 cents, or 1.8%, to $46.58 a barrel in New York. Brent crude, a benchmark used to price international oils, rose 88 cents, or 1.8%, to $49.23 a barrel in London. Oil prices also climbed last week after dropping steeply in June and July.

That helped companies like pipeline operator Kinder Morgan, which rose 2.3% to $21.78. Apache climbed 2.2% to $50.97.

Metals prices also rose. Gold went up $9.40 to $1,456.90 an ounce. Silver rose 3 cents to $19.87 an ounce. Copper rose 2 cents to $2.17 a pound. Bond prices slipped and the yield on the 10-year Treasury note rose to 1.58% from 1.56%.

Stocks have wavered lately as investors review mixed reports about the U.S. economy. On Tuesday the Federal Reserve said U.S. factories cranked out more autos, machinery and chemicals in July, which suggests manufacturers might be recovering, though growth remains little changed from a year earlier and manufacturers aren’t adding many jobs. Meanwhile, the Commerce Department said the pace of home construction grew by the most since February.

Tea maker Hain Celestial Group delayed its quarterly report because of accounting issues and said it doesn’t expect to reach its financial projections for the year. The stock dived 26.3% to $39.35.

Uniform maker Cintas said it will buy G&K Services, a uniform and facility services maker, for $97.50 a share, or $1.93 billion. G&K Services jumped 17.7% to $96.70 and Cintas rose 5.2% to $112.99.

Beauty products maker Coty posted results that surpassed expectations, but it said little about its purchase of Procter & Gamble’s beauty business, a $15-billion deal expected to close in the next few months. Coty said it’s “premature” to comment on how the combined business will do. Its shares skidded 4.9% to $28.28.

TJX, the parent of T.J. Maxx, Marshalls and other stores, sank 5.8% to $77.97 after it said higher wages and the strong dollar will hurt its results in the third quarter.

Dick’s Sporting Goods jumped 6.1% to $58.76 after it announced better-than-expected quarterly results and raised its projections for the year.

Wholesale gasoline rose 2 cents to $1.42 a gallon. Heating oil picked up 1 cent to $1.46 a gallon. Natural gas rose 3 cents to $2.62 per 1,000 cubic feet.

The CAC 40 in France shed 0.8%, Britain’s FTSE 100 lost 0.7% and Germany’s DAX fell 0.6%. Japan’s Nikkei 225 slid 1.6% as the yen gained against the U.S. dollar. South Korea’s Kospi and Hong Kong’s Hang Seng index each slipped 0.1%.

UPDATES:

2:30 p.m.: This article was updated with closing prices and additional details.

9:30 a.m.: This article was updated with more recent prices and additional details.

This post was originally published at 7 a.m.