U.S. stocks fell Thursday as technology firms and small companies skidded. Investors bought high-dividend stocks, which pulled the market away from steeper losses.
Stocks dropped in early trading as investors reacted to rising interest rates in the U.S. while the Bank of England came unexpectedly close to raising interest rates for the first time in 10 years. Smaller, more domestically oriented companies fell as investors wondered if the expanding special counsel’s investigation in Washington will affect President Trump’s proposed agenda of cuts in taxes and regulations.
“Investors are getting a bit antsy waiting for these pro-growth policies,” said Karyn Cavanaugh of Voya Investment Strategies.
Elsewhere, technology companies continued their recent slump, while shoe retailer Nike and toymaker Mattel both fell. But industrial companies rose on new signs U.S. manufacturing has steadied, and utilities and real estate companies did well.
The Standard & Poor’s 500 index fell 5.46 points, or 0.2%, to 2,432.46. It was down as much as 19 points in the morning. The Dow Jones industrial average slipped 14.66 points, or 0.1%, to 21,359.90 after it closed at a record high Wednesday. The Nasdaq composite dropped 29.39 points, or 0.5%, to 6,165.50. The Russell 2000 index of small-company stocks slid 7.49 points, or 0.5%, to 1,410.08.
Technology companies, which have done far better than the rest of the market this year, continued to slide. Apple fell 0.6% to $144.29. Alphabet, Google’s parent company, declined 0.8% to $960.18. Symantec sank 2.3% to $28.41. Tech stocks have been slipping since last Friday, and the Nasdaq is on track for its second consecutive weekly loss.
Nike declined 3.2% to $52.90 after the company said it would eliminate 1,400 jobs, or about 2% of its staff positions, and reduce the number of sneaker and clothing styles it sells by about a quarter. Amazon fell 1.3% to $964.17.
Grocery chain Kroger plunged 18.9% to $24.56, its biggest one-day drop since 1999. The company cut its annual profit outlook as it deals with growing competition from discount chain Aldi and from Lidl, a German chain opening its first locations in the U.S. Competitor Supervalu sank 7.4% to $3.76.
Mattel dropped 6.7%, to $20.67. The toy company said it wants to restructure its business to help bring new products to market faster and will reduce its dividend payments.
The Washington Post reported late Wednesday that the special counsel investigating Russian influence in the presidential campaign is now examining whether Trump tried to obstruct justice. Allegations of obstruction arose last month when the president fired FBI Director James Comey.
Trump has touted an agenda aimed at getting the economy to grow faster. That could help smaller companies because they are more domestically focused and thus more dependent on economic growth. Those stocks made dramatic gains after Trump was elected.
On Thursday, subprime consumer lender World Acceptance tumbled 12.4% to $73. Diagnostic imaging company Lantheus Holdings sank 8.9% to $14.80. Publisher Time fell 3.9% to $13.45.
Materials companies stumbled after steelmaker Nucor gave a disappointing forecast for the current quarter. Nucor said its steel mills are struggling this quarter because of aggressive competition, and its stock declined 7.6% to $54.60.
The dollar rose to 110.86 yen from 109.53 yen. The euro fell to $1.1155 from $1.1220.
As the dollar regained strength, the price of gold sank $21.30, or 1.7%, to $1,254.60 an ounce and silver fell 42 cents, or 2.5%, to $16.72 an ounce. Copper fell 1 cent to $2.57 a pound.
The Bank of England left interest rates alone, but it came closer to raising them than many expected. Three of the eight members of its Monetary Policy Committee wanted to raise rates by a quarter of a point. A growing number of its policymakers seem to be worried about a jump in inflation that is eating into the living standards of the British.
Germany’s DAX sank 0.9% while the FTSE 100 in Britain dropped 0.7%. The CAC-40 in France fell 0.5%. Japan’s Nikkei 225 stock index fell 0.3% and South Korea’s Kospi retreated 0.5%. The Hang Seng in Hong Kong dropped 1.2%.
On Wednesday the Federal Reserve raised U.S. interest rates for the third time in about six months and suggested that it will raise rates again later this year.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.16% from 2.13%. Stocks that pay large dividends — including utilities, real estate investment trusts and phone companies — did better than the rest of the market.
Benchmark U.S. crude fell 27 cents to $44.46 a barrel in New York. Brent crude, used to price international oils, slipped 8 cents to $46.92 a barrel in London.
Wholesale gasoline stayed at $1.44 a gallon. Heating oil stayed at $1.42 a gallon. Natural gas jumped 12 cents, or 4.2%, to $3.06 per 1,000 cubic feet.
2:55 p.m.: This article was updated with closing prices, context and analyst comment.
This article was originally published at 6:55 a.m.