Bank and industrial stocks slide, weighing on indexes
U.S. stocks capped another day of listless trading with a slight loss Thursday as a slide in banks and industrial companies offset solid gains for the technology sector.
Homebuilders also declined following new data showing sales of new U.S. homes slumped in July.
Investors had their eye on the latest developments in the U.S.-China trade dispute as the nations held their first high-level talks in two months. Traders also were looking ahead to Friday’s gathering of central bankers, including Federal Reserve Chairman Jerome H. Powell, in Jackson Hole, Wyo., an annual symposium that has often generated market-moving news.
“It’s been a fairly quiet day,” said Paul Springmeyer, head of investments at U.S. Bank Wealth Management. “There’s obviously some reservation about what’s going to come out from Jackson Hole.”
The Standard & Poor’s 500 index fell 4.84 points to 2,856.98. The Dow Jones industrial average fell 76.62 points to 25,656.98. The Nasdaq composite slipped 10.64 points to 7,878.46. The Russell 2000 index of smaller-company stocks fell 5.49 points to 1,717.05.
Stocks spent much of the day hovering just below their prior-day closing levels.
Markets showed little reaction to the latest round of dueling tariffs between the U.S. and China. The countries imposed 25% tariffs on $16 billion worth of each other’s goods Thursday, including automobiles and factory equipment. The increases were announced previously.
Beijing has rejected U.S. demands to scale back technology development plans that its trading partners say violate Chinese market-opening pledges and that American officials worry might erode the United States’ industrial leadership.
Investors came into this week feeling cautiously optimistic that the talks may lead to an end to the U.S.-China trade dispute. The market has mostly shrugged off the trade uncertainty in recent weeks, focusing instead on another strong quarter of corporate earnings growth. Earnings at S&P 500 companies have surged 23% in the first half of this year versus a year earlier, according to S&P Global Market Intelligence.
“The market is waiting to see the effect of the tariffs,” said JJ Kinahan, chief market strategist for TD Ameritrade. “It’s hard to argue what’s going on with earnings.”
Of more immediate interest for the market is Friday’s annual gathering of central bankers. Powell was scheduled to deliver a keynote speech that traders are sure to scrutinize for signs of Fed views on Turkey’s currency crisis and U.S.-China trade tensions. If Powell sounds confident, investors are likely to conclude the Fed will keep gradually raising interest rates.
Banks and other financial stocks took some of the biggest losses Thursday. Charles Schwab fell 1.5% to $50.17. Industrial stocks lost ground too. Caterpillar fell 2% to $136.79.
New housing data also weighed on stocks. The Commerce Department said sales of new U.S. homes slumped 1.7% in July, the second monthly decline in a row. Toll Bros. led a slide in homebuilder shares, falling 2.8% to $37.29.
“The backbone of the progress we’ve seen this year so far in the market really is an indication of how strong the economy is in general,” Springmeyer said. “Housing has probably been the one single piece of economic information to come out recently that has been somewhat disappointing.”
Hormel Foods fell 3.1% to $37.33 after the Spam maker cut its sales outlook, partly because of uncertain trade conditions. Other packaged-foods companies also declined. Campbell Soup fell 1.5% to $40.61.
Synopsys climbed 6.4% to $100.75 after the maker of software that’s used to test and develop chips posted quarterly results that beat expectations.
Williams-Sonoma jumped 16.1% to $72.66 after the home furnishings and cookware company posted results that impressed analysts.
Technology companies led the gainers. Advanced Micro Devices climbed 6.7% to $22.29.
Benchmark U.S. crude settled essentially flat at $67.83 a barrel in New York. Brent crude, used to price international oils, slipped 0.1% to $74.73 a barrel in London.
Bond prices were little changed. The yield on the 10-year Treasury held steady at 2.82%.
The dollar rose to 111.28 yen from 110.57 yen. The euro weakened to $1.1536 from $1.1589.
Gold fell 0.8% to $1,194 an ounce. Silver slid 1.4% to $14.54 an ounce. Copper fell 0.6% to $2.68 a pound.
Heating oil rose 0.3% to $2.18 a gallon. Wholesale gasoline fell 0.4% to $2.06 a gallon. Natural gas rose 0.3% to $2.96 per 1,000 cubic feet.
5:05 p.m.: This article was updated with closing prices, context and analyst comment.
This article was originally published at 7:35 a.m.
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