Healthcare companies pull stocks lower
Stocks fell in light trading Thursday for a second day as investors sifted through a mix of earnings reports.
The major indexes wavered between small gains and losses in the morning, then moved lower in the afternoon as investors dumped healthcare stocks. Disappointing earnings from a few retailers helped push down shares of companies that rely on consumer spending.
The losses were modest, and both the Standard & Poor’s 500 index and Dow Jones industrial average remain close to their record highs set last week. Many investors are holding back from big bets now that the bulk of earnings reports are out and many traders are still on vacation. Only 2.9 billion shares traded on the New York Stock Exchange, a very low level.
“We’re in an information vacuum,” said Joseph Tanious, senior investment strategist at Bessemer Trust.
The Dow fell 33.07 points, or 0.2%, to 18,448.41. The S&P 500 slipped 2.97 points, or 0.1%, to 2,172.47. The Nasdaq composite edged down 5.49 points, or 0.1%, to 5,212.20.
Biotech stocks stumbled again. Celgene and Regeneron Pharmaceuticals each fell more than 1% as investors worry about a backlash against price increases that politicians say amount to price gouging. Mylan, which has been under fire for steep increases in its EpiPen anti-allergy medicine, fell 0.7%.
Tiffany & Co. had the biggest jump in the S&P 500. The luxury retailer’s shares rose 6.4% to $73.28 after it reported a slight increase in fiscal second-quarter profits that beat analyst estimates.
Results from other companies were disappointing.
The biggest loser in S&P 500 was Dollar General, which plunged nearly 18% to $75.61 after reporting earnings and revenue that fell short of forecasts. Signet Jewelers, the second-biggest decliner, fell nearly 13% to $83.44 after its results also missed estimates.
Overall, earnings per share for companies in the S&P 500 are expected to fall 1.8% in the second quarter, according to S&P Global Market Intelligence. That would be the fourth quarter in a row of drops, nearly unheard of outside of a recession.
Many analysts expect earnings to surge toward the end of the year, which may explain why stocks are holding near highs. But some experts are not convinced.
“If you look at earnings, they’re just not that great,” said Phil Blancato, chief executive of Phil Blancato. “There isn’t enough news to get people to sell, and there isn’t enough news to get people to buy.”
Among California stocks making big moves, Guess leaped more than 22% to $18.20 after the Los Angeles clothing firm reported earnings that soundly beat forecasts, thanks partly to cost controls, and raised its full-year forecasts.
HP slipped 0.2% to $14.37 after the Palo Alto printer maker gave an outlook for the current quarter that disappointed investors.
In overseas trading, Germany’s DAX dropped 0.9%, France’s CAC-40 lost 0.7% and Britain’s FTSE 100 fell 0.3%. Major markets in Asia were mostly unchanged. Japan’s Nikkei 225 fell 0.2%.
Benchmark U.S. crude oil rose 55 cents to $47.32 a barrel. Brent crude, which is used to price oil internationally, rose 55 cents to $49.60 a barrel. Wholesale gasoline was little changed at $1.51 a gallon, heating oil rose 1 cent to $1.51 a gallon and natural gas rose 5 cents to $2.85 per 1,000 cubic feet.
U.S. government bond prices slipped. The yield on the 10-year Treasury rose to 1.58%. The dollar rose to 100.57 yen from 100.49 yen, and the euro rose to $1.1281 from $1.1261.
The price of gold fell $5.10 to $1,324.60 an ounce, silver fell 7 cents to $18.62 an ounce and copper was little changed at $2.08 a pound.
ALSO
Young kids love YouTube more than Disney and Oreo, study finds
Bill to protect widows from foreclosure heads to Gov. Jerry Brown
Starbucks iced drinks obviously include ice, judge says, tossing lawsuit
UPDATES:
3 p.m.: This article was updated with closing prices and additional details.
7:50 a.m.: This article was updated with more recent prices and additional details.
This article was originally published at 7:35 a.m.
