Declines by Boeing, General Electric and other big industrial companies weighed on U.S. stocks Thursday, pulling the major U.S. indexes down from the record highs they set the day before.
Energy stocks contributed to the modest decline following a slide in crude oil prices. Technology companies accounted for the biggest gains. Bond yields climbed to their highest level since March as demand for bonds waned.
Investors kept an eye on company earnings news and on developments in Washington ahead of a possible federal government shutdown this weekend.
The market's fall from its latest highs represents “just a little setback,” said Craig Callahan, chief investment officer at Icon Advisers. “We're still bullish and expect the market to move higher over the next year.”
The Standard & Poor's 500 index fell 4.53 points, or 0.2%, to 2,798.03. The Dow Jones industrial average fell 97.84 points, or 0.4%, to 26,017.81. The Nasdaq slipped 2.23 points, or 0.03%, to 7,296.05. The Russell 2000 index of smaller-company stocks slipped 9.93 points, or 0.6%, to 1,576.73.
Losers outnumbered winners by almost three to one. Trading in declining stocks also was more than twice as heavy as it was in shares that rose.
A federal government shutdown could have a negative effect on consumer spending and financial conditions, though it's unlikely that it would cause lasting or broad damage to the economy, Credit Suisse economists concluded in a note published Thursday.
But it could sap some of the momentum that helped drive the stock market to new highs this week, said J.J. Kinahan, chief market strategist at TD Ameritrade.
“If you're going to shut down the government right after that, it's really the kind of thing that would just suck the confidence out of the market overall.”
Bond prices fell. The yield on the 10-year Treasury climbed to 2.63% from 2.59%.
“You're in a little bit of a tough spot with bonds,” Kinahan said. “Do you want to buy bonds of a government that's shut down? Yet you want to go for bonds whenever you're looking for protection, and the last time the government shut down, bonds actually rallied.”
A slide in industrials stocks weighed heaviest on the market Thursday. Boeing had its worst day since September 2016, falling 3.1% to $340.16. General Electric retreated 3.3% to $16.77.
Alcoa tumbled 7% to $53 after reporting a wider quarterly loss. Alcoa said it will freeze its pension and move some employees to a defined contribution retirement plan starting in 2021 as it looks to cut costs.
Several banks also reported quarterly results. Morgan Stanley shares rose 0.9% to $55.84 after its earnings beat Wall Street's expectations. Bank of NY Mellon’s and KeyCorp’s results disappointed. Bank of NY Mellon shares slid 4.4% to $55.35, and KeyCorp fell 2.1% to $20.82.
Tech stocks, one of the biggest gainers this year, continued to rise. Advanced Micro Devices ticked up 2.4% to $12.47.
Traders welcomed news that Wyndham Worldwide agreed to buy La Quinta's hotel franchise and management business. Wyndham climbed 4.8% to $122.73, and La Quinta rose 3.8% to $20.18.
A decline in oil prices weighed on energy-sector stocks. Baker Hughes slid 4.3% to $34.74.
Benchmark crude slipped 2 cents to settle at $63.95 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, fell 7 cents to close at $69.31 a barrel.
The dollar rose to 111.98 yen from 111.13 yen.
The price of bitcoin recouped some of its recent losses. The digital currency rose 2.9% to $11,462, according to the tracking site CoinDesk. Bitcoin futures on the Cboe Futures Exchange rose 8.7% to settle at $11,765. The futures enable investors to make bets on the future price of bitcoin.
Gold dropped $12 to $1,327.20 an ounce. Silver fell 21 cents to $16.95 an ounce. Copper rose 1 cent to $3.20 a pound.
Wholesale gasoline rose 3 cents to $1.88 a gallon. Heating oil fell a penny to $2.06 a gallon. Natural gas fell 4 cents, or 1.3%, to $3.19 per 1,000 cubic feet.
Major stock indexes in Europe finished mixed. Germany's DAX rose 0.7%, while France's CAC 40 was little changed. Britain's FTSE 100 fell 0.3%.