Stocks slip, with smaller companies falling more than big ones
Losses for energy and technology companies left most U.S. stocks lower Thursday. Smaller companies fared worse as the dollar remained at 15-month lows.
Energy firms’ stocks weakened as the price of oil turned lower, and technology companies declined as Apple gave up a piece of its big gain from the day before. Investors bought government bonds after some shaky economic news in the U.S. and Britain. That sent bond yields down, which hurt financial companies. Industrial companies such as 3M did well, and so did large drugmakers such as Pfizer.
Small companies, which surged in November and December, have slumped this week. Firearms maker Sturm Ruger tumbled Thursday after it said sales fell in the second quarter. Sporting goods companies such as Big 5 and Vista Outdoor also sank. Smaller banks fared worse than larger ones.
Julian Emanuel, an equity strategist for UBS, said that as the dollar continues to lose strength, investors are selling smaller and more domestically focused companies and buying more international businesses, as the weaker dollar will help their profits and sales outside the U.S.
“Most people didn’t expect the degree of dollar weakness that we’re seeing,” he said. The ICE U.S. Dollar Index is down 9% this year and hasn’t been this low in about 15 months.
The Standard & Poor’s 500 index fell 5.41 points, or 0.2%, to 2,472.16. The Dow Jones industrial average notched its eighth gain in a row, edging up 9.86 points, or less than 0.1%, to 22,026.10. The Nasdaq composite fell 22.30 points, or 0.4%, to 6,340.34. The Russell 2000 index of smaller companies sank 7.67 points, or 0.5%, to 1,405.23 after Wednesday’s sharp drop.
Near the close of trading, stocks turned a bit lower after the Wall Street Journal reported that special counsel Robert S. Mueller III has impaneled a grand jury in his investigation of Russia’s interference in the 2016 presidential election.
Companies have reported strong second-quarter results lately as corporate earnings continue to grow. But with stocks at record highs, the market hasn’t reacted much: The S&P 500 is flat over the last two weeks.
Companies that didn’t live up to investors’ expectations took losses.
Symantec slid 2.1%, to $30.27 after the maker of security software announced disappointing quarterly sales and issued forecasts for the rest of the year that weren’t as good as analysts had hoped. The company also agreed to sell its website security business to DigiCert for $950 million in cash and a 30% stake in DigiCert.
3-D printer maker 3D Systems plunged 21.3% to $13.39 after its quarterly results fell short of analyst estimates and it cut its projections for the full year.
Apple fell 1% to $155.57 after Wednesday’s big jump.
Fitbit leaped 15.2% to $5.84 after the maker of wearable fitness trackers posted a smaller loss than expected.
Oil prices turned lower. Benchmark U.S. crude fell 56 cents, or 1.1%, to $49.03 a barrel. Brent crude, the international standard, fell 35 cents to $52.01 a barrel.
The Institute for Supply Management said production, orders and hiring by U.S. services companies all declined in July. Its services index slipped to its lowest reading in 11 months, which suggests the economy is still growing at a steady but modest pace.
Meanwhile, the Bank of England reduced its economic growth forecasts. That sent the British FTSE 100 index up 0.9%, however, as investors were glad the bank probably won’t raise interest rates any time soon. The pound also fell.
The yield on the 10-year Treasury note fell to 2.22% from 2.27%. That sent interest rates lower, which cuts into the profits banks can make on mortgages and other loans.
Tesla jumped 6.5% to $347.09 after the maker of electric cars said it’s confident it can meet its production goals for its new, lower-priced Model 3 sedan. The company also posted a smaller net loss than expected.
Kellogg, the maker of Frosted Flakes, Pop Tarts and Eggo waffles, reported another decline in sales as revenue from breakfast foods slipped. But the results weren’t as bad as experts expected. Its stock climbed 4.3% to $70.36.
Avon Products lost money in its latest quarter and said sales weren’t as good as expected. The cosmetics retailer has been struggling for years to revive its business, and it said Thursday that Chief Executive Sheri McCoy will leave the company. The stock sank 10.7% to $3. It’s down 40.5% this year.
Wholesale gasoline fell 1 cent to $1.63 a gallon. Heating oil fell 2 cents to $1.64 a gallon. Natural gas slipped 1 cent to $2.80 per 1,000 cubic feet.
Gold fell $4 to $1,274.40 an ounce. Silver fell 10 cents to $16.63 an ounce. Copper fell less than 1 cent to $2.88 a pound.
The dollar fell to 110.06 yen from 110.61 yen. The euro rose to $1.1866 from $1.1860.
In France, the CAC 40 rose 0.5%. The DAX in Germany lost 0.2%. The Kospi of South Korea dropped 1.7%. Japan’s benchmark Nikkei 225 and Hong Kong’s Hang Seng each fell 0.3%.
UPDATES:
3 p.m.: This article was updated with closing prices, context and analyst comment.
This article was originally published at 8:05 a.m.
