Stocks notch modest losses; oil prices surge
A slide in technology and consumer-focused companies helped pull U.S. stock indexes modestly lower Thursday, offsetting strong energy sector gains.
A broad swath of retailers also notched losses.
Most of the big gainers were oil production and drilling companies, which got a boost from a report indicating fuel stockpiles fell precipitously last week. The price of U.S. crude jumped after the report, closing nearly 5% higher.
U.S. bond yields surged as traders reacted to the European Central Bank’s decision to leave its key interest rates unchanged and hold off on extending a stimulus program.
In the absence of any major new economic data, the stock indexes continued a recent pattern of mostly sluggish trading.
“It’s been many, many days since we’ve had a substantive move,” said Erik Davidson, chief investment officer for Wells Fargo Private Bank. “It still feels like a holiday week.”
The Dow Jones industrial average fell 46.23 points, or 0.3%, to 18,479.91. The Standard & Poor’s 500 index slid 4.86 points, or 0.2%, to 2,181.30.
The sell-off in technology stocks weighed on the Nasdaq composite index, which sank 24.44 points, or 0.5%, to 5,259.48. The tech-heavy index set all-time highs Tuesday and Wednesday.
Apple slid 2.6% to $105.52 a day after the consumer electronics giant introduced its newest slate of products, including an iPhone with no built-in analog headphone jack.
Investors also got a dash of tech sector deal news.
Hewlett Packard Enterprise slid 3.2%, to $21.38 after it agreed to spin off part of its business software unit to Micro Focus in a deal valued at $8.8 billion.
Intel slipped 2 cents to $36.44 after it said it would spin off its cybersecurity business into a new company called McAfee for $3.1 billion in cash. Private equity firm TPG is to invest $1.1 billion in the new company and own a majority stake.
All told, technology stocks were the biggest decliner in the S&P 500, shedding 0.9%. The sector is up 9.1% this year.
“The tech sector has been strong and outside of today continues to be strong,” said Willie Delwiche, an investment strategist at Baird.
Investors hammered retailers Tractor Supply and Pier 1 Imports.
Tractor Supply dived 16.9% to $69.38 after the farming and hardware goods retailer said its business is being hurt by poor economic conditions in rural, energy-producing areas where it does most of its business. The stock was the biggest decliner in the S&P 500.
Pier 1 Imports tumbled 15% to $4.08 after the home decor retailer gave weak quarterly guidance and said its president and CEO will leave the company at the end of the year.
Several oil drilling and production companies rose on the latest oil stockpiles figures, pushing the S&P 500’s energy sector up 1.7%. The sector is up 17.4% this year.
Chesapeake Energy leaped 13.7% to $7.74, the biggest gainer in the S&P 500 index. Diamond Offshore Drilling climbed 9% to $17.40. Murphy Oil rose 6.8% to $29.75.
Traders also bid up crude oil prices. Benchmark U.S. crude rose $2.12, or 4.7%, to close at $47.62 a barrel. Brent crude, used to price international oils, rose $2.01, or 4.2%, to $49.99.
The news out of the European Central Bank helped ease demand for U.S. bonds, driving their prices lower and pushing yields higher. The yield on the 10-year Treasury rose to 1.60% from 1.54%.
“They’re not adding more stimulus, and that maybe makes people feel less like they need to pile into U.S. bonds,” Delwiche said.
At a news conference, ECB President Mario Draghi seemed relatively confident about the economy and less inclined to hint at more stimulus than some analysts had expected. He urged governments to do their part.
Despite Draghi’s more confident tone, the ECB will have to take more stimulus action at its October or December meetings, analysts said.
News of the ECB’s decisions weighed on most of Europe’s major stock indexes. Germany’s DAX fell 0.7%. France’s CAC-40 declined 0.3%. The FTSE 100 index of leading British shares rose 0.2%.
Earlier, some markets in Asia closed higher after a report showing that imports rose in China last month for the first time since late 2014, while a contraction in exports narrowed. The Hang Seng index in Hong Kong gained 0.8%. Seoul’s Kospi ticked up 0.1%. India’s Sensex rose 0.3%. Japan’s Nikkei 225 index fell 0.3%.
In other energy trading, wholesale gasoline rose 7 cents, or 5.2%, to $1.42 a gallon. Heating oil rose 6 cents, or 3.9%, to $1.48 a gallon. Natural gas rose 13 cents, or 4.9%, to $2.81 per 1,000 cubic feet.
Among metals, gold slid $7.60 to $1,341.60 an ounce. Silver fell 17 cents to $19.68 an ounce. Copper held steady at $2.10 a pound.
In currency markets, the dollar strengthened to 102.49 yen from 101.75 on Wednesday. The euro climbed to $1.1257 from $1.1245.
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UPDATES:
2:35 p.m.: This article has been updated with closing prices and additional details.
7:55 a.m.: This article has been updated with more recent figures and additional details.
This article was originally published at 7:05 a.m.
