Banks and tech stocks drag market to a modest loss

The New York Stock Exchange on Wall Street.
(Johannes Eisele / AFP/Getty Images)

Stocks on Wall Street closed modestly lower Wednesday, handing the market its second straight loss.

Banks and technology companies accounted for much of the slide as investors shifted money into U.S. bonds, precious metals and other holdings considered havens after more than a week of aggressive buying.

Energy stocks took the heaviest losses after a 4% drop in the price of U.S. crude oil. That helped outweigh gains in healthcare, utilities and elsewhere in the market.


The latest decline followed a broad drop in stocks that ended a five-day winning streak for the market. The Federal Reserve set off last week’s rally when it signaled that it is willing to cut interest rates to help stabilize the economy if the U.S.-China trade war starts to crimp growth.

Investors are worried that the dispute will drag on much longer than previously expected, weighing on economic growth and corporate profits. That has traders looking ahead to next week’s Fed meeting.

“There are concerns about whether or not the Fed next week at its meeting is going to in fact continue to move its stance toward lowering rates,” said Quincy Krosby, chief market strategist at Prudential Financial. “The increasing concern is that the global economy continues to slow and that the slowdown is affecting the United States as well.”

The Standard & Poor’s 500 index slipped 5.88 points, or 0.2%, to 2,879.84. The benchmark index rose 4.4% last week, its best weekly performance of 2019. It’s now about 2.2% below the record high it set April 30.

The Dow Jones industrial average fell 43.68 points, or 0.2%, to 26,004.83. The technology-heavy Nasdaq composite index fell 29.85 points, or 0.4%, to 7,792.72. The Russell 2000 index of smaller-company stocks edged up 0.68 of a point, or less than 0.1%, to 1,519.79.

Major indexes in Europe fell broadly.

The sell-off in U.S. markets reflects heightened investor uncertainty over trade and its effect on the economy.


President Trump’s decision to threaten to expand the trade war to Mexico made a jittery market even more uneasy. Those potential tariffs have been indefinitely postponed, but the move left its mark.

“This was a game changer. The idea that the administration would use tariffs to further policy that is not related to trade is concerning,” said Kristina Hooper, chief global market strategist at Invesco.

Investors will probably have to deal with more volatility before the Group of 20 economic summit this month. Trump has said he plans to meet with Chinese President Xi Jinping at the summit in Osaka, Japan. But Trump has also said that if the two can’t reach an agreement on trade, he’ll proceed with tariffs on $300 billion worth of goods from China that aren’t already subject to import taxes.

Technology companies accounted for much of the market’s slide Wednesday. The sector has been under the most pressure from swings in sentiment over the U.S.-China trade war. Cisco Systems fell 2.2%. Micron Technology dropped 5.4%.

Banks declined as bond prices rose, nudging yields down. The yield on the 10-year Treasury note fell to 2.12% from 2.14%. Lower yields pull down interest rates on loans, reducing banks’ profits. Bank of America shares fell 1%, and Citigroup fell 1.6%.

Healthcare firms, utilities and industrial companies were among the gainers. Johnson & Johnson rose 1.4%, Exelon rose 2.5% and American Airlines Group advanced 1.7%.


Dave & Buster’s Entertainment plunged 22.4%, its biggest one-day loss in more than a year, after the company gave investors a dismal first-quarter financial report and slashed its revenue forecast for the year.

Mattel climbed 5.3% on news reports saying the toymaker received and rejected another merger offer from Bratz doll maker MGA Entertainment.

Medidata Solutions slid 3.6% after the company announced a deal to be acquired at a discount price by French software company Dassault Systems. The deal values the provider of cloud-based services and software at $92.25 a share, less than the shares’ Tuesday closing price of $94.75.

Energy futures fell Wednesday. Benchmark U.S. crude slid 4% to $51.14 a barrel. Brent crude oil, the international standard, slid 3.7% to $59.97 a barrel.

Wholesale gasoline fell 4% to $1.69 a gallon. Heating oil fell 2.3% to $1.78 a gallon. Natural gas fell 0.5% to $2.39 per 1,000 cubic feet.

Gold rose 0.4% to $1,336.80 an ounce. Silver inched up 0.1% to $14.75 an ounce. Copper fell 0.7% to $2.65 a pound.