Stocks slip again as tech slump continues
Technology companies suffered another day of sharp losses Thursday, although the broader market didn’t fare as badly.
Chipmakers sank after an executive from KLA-Tencor said business in the fourth quarter looks to be weaker than the company expected. Apple also fell, and social media companies continued to sink after congressional hearings weighed on the stocks the day before.
The Standard & Poor’s 500 index shed 10.55 points, or 0.4%, to 2,878.05. The Nasdaq composite fell 72.45 points, or 0.9%, to 7,922.73. The Russell 2000 index of smaller-company stocks declined 13.18 points, or 0.8%, to 1,714.47.
Industrial companies and high-dividend stocks rose, however, limiting the market’s losses. The Dow Jones industrial average edged up 20.88 points, or 0.1%, to 25,995.87 as Boeing, 3M and United Technologies gained ground.
Apple fell 1.7% to $222.10. KLA-Tencor slid 9.7% to $107.28. Facebook retreated 2.8% to $162.53, Twitter shed 5.9% to $30.81, and Google’s parent company, Alphabet, declined 1.3% to $1,183.99. Those companies took similar losses Wednesday.
The tech-heavy Nasdaq composite is down 2.3% this week. But for the second day in a row, big losses for technology companies and for Amazon, the second-largest U.S. company, were partly canceled out by gains elsewhere.
Karyn Cavanaugh, senior markets strategist at Voya Investment Management, said investors are still optimistic about the U.S. economy, which has helped other stocks.
“They know the underlying fundamentals are good,” she said. “Company earnings are not turning tail [and running away] because of the trade wars and all of the political drama.”
Technology companies outperformed the broader S&P 500 in each of the last four years and are doing it again this year. Cavanaugh said that the companies have posted very strong profits at a time that global economic growth has been slow and that investors will probably continue to find that appealing.
Bond prices turned higher. The yield on the 10-year Treasury note fell to 2.87% from 2.90%. That made big dividend payers — including utilities and household goods makers — more appealing, and their stocks rose.
No major trade developments emerged during the trading hours. The United States and Canada continued negotiations to keep Canada in an updated version of the North American Free Trade Agreement.
The United States could put a 25% tax on $200 billion in Chinese goods after a public comment period on the proposal expired Thursday, and media reports have said the tariffs could be announced this week. China has vowed to retaliate.
The United States and China have put tariffs on $50 billion worth of each other’s imports in the last few months. Larger tariffs would represent a major escalation in their dispute.
CBS jumped 3.2% to $54.62 after reports that the TV network and its parent company, National Amusements, are in talks to settle a lawsuit. As part of that settlement, National Amusements would give up on its bid to merge CBS with Viacom, which it also controls. CBS’ board and shareholders opposed the merger. Viacom shares slipped 0.6% to $29.25.
Although the U.S. economy has gained strength this year, investors are worried that rising interest rates and trade disputes will harm fast-growing but often fragile economies elsewhere. The currencies of Argentina, Turkey and Iran have all hit record lows recently, and Venezuela’s currency has lost almost all its value.
While those countries face different problems, the Federal Reserve’s interest rate increases affect all of them by driving up their debt costs and making U.S. assets more attractive. Investors are responding by pulling money out of emerging markets, and that has exposed financial vulnerabilities.
Some investors fear that big losses in some developing markets could ripple out into the global financial system, as they did in the late 1990s when several Asian countries eventually required financial rescue.
Oil prices fell for the second day in a row. Benchmark U.S. crude slid 1.4% to $67.77 a barrel in New York. Brent crude, used to price international oils, fell 1% to $76.50 a barrel in London.
Wholesale gasoline fell 0.7% to $1.95 a gallon. Heating oil slumped 1.1% to $2.21 a gallon. Natural gas fell 0.8% to $2.77 per 1,000 cubic feet.
Gold rose 0.2% to $1,204.30 an ounce. Silver fell 0.3% to $14.18 an ounce. Copper rose 1% to $2.64 a pound.
The dollar slipped to 110.83 yen from 111.51 yen. The euro edged up to $1.1625 from $1.1623.
Bitcoin and other cryptocurrencies fell steeply for the second day in a row after a report that Goldman Sachs was delaying the establishment of a trading desk for cryptocurrencies.
2:25 p.m.: This article was updated with closing prices, context and analyst comment.
This article was originally published at 1:20 p.m.
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