Stocks finish down as tech companies fall again

The opening bell hangs above the trading floor at the New York Stock Exchange.
The opening bell hangs above the trading floor at the New York Stock Exchange.
(Mark Lennihan / Associated Press)

After a wobbly day of trading, U.S. stocks fell for the seventh time in eight days Monday as technology companies continued to slide. Industrial companies and stocks that pay high dividends rose, and the market’s losses were limited relative to the steep drops it suffered last week.

Stocks opened lower and repeatedly switched between small gains and losses before falling in the last hour of trading. Along with tech firms, healthcare and energy companies and retailers fell as the stocks that have led the U.S. market higher this year continued to struggle.

Defense contractors L3 and Harris made the biggest gains in the Standard & Poor’s 500 index after announcing a deal to combine. Smaller companies fared better than the rest of the market and finished broadly higher.


Jason Pride, chief investment officer for private clients at Glenmede, said investors expect many years of powerful profit growth from technology-oriented companies such as Apple, Amazon and Netflix. Over the last two weeks, Wall Street has started considering the possibility that interest rates will rise more quickly, taking a bigger chunk out of those future profits.

“The more the company’s valuation is dependent on some profit way ahead in time as opposed to the profits coming today, the more [interest-]rate hikes should impact the valuation of that company,” Pride said. He called the recent downturn a healthy development for stocks.

“A 5% to 10% pullback of that magnitude is very normal and very reasonable for this market to go through,” he said.

The S&P 500 index fell 16.34 points, or 0.6%, to 2,750.79 on Monday. The Dow Jones industrial average fell 89.44 points, or 0.4%, to 25,250.55. The Nasdaq composite slid 66.15 points, or 0.9%, to 7,430.74. The Russell 2000 index of smaller-company stocks rose 6.42 points, or 0.4%, to 1,553.09.

The S&P 500 sank 4.1% last week — its third weekly loss in a row and its biggest since late March — as investors worried about rising interest rates and trade tensions between the United States and China.

The tech firms that have led the market higher in recent years, including some of the world’s most valuable companies, continued to decline. Apple slid 2.1% to $217.36, and chipmaker Nvidia declined 4.5% to $235.38.


Netflix, which is scheduled to report its third-quarter results late Tuesday, fell 1.9% to $333.13. It has sunk 20.5% since disclosing weak user growth three months ago.

Harris and L3 are combining to form L3 Harris Technologies, which will have annual sales of about $16 billion. That would make it the sixth-largest U.S. defense contractor and one of the top 10 globally. L3 shares jumped 12.8% to $220.91. Harris shares climbed 11.9% to $173.25.

Bank of America’s third-quarter profit and revenue beat analyst expectations, but Wall Street was disappointed with the company’s loan growth. The company has emphasized responsible growth recently, and like other banks, it is benefiting from last year’s corporate tax cut and rising interest rates. Its stock slipped 1.9% to $27.92.

Bond prices edged down. The yield on the 10-year Treasury note rose to 3.16% from 3.14%.

Rising bond yields often lead to losses for high-dividend companies because many investors think of those stocks as alternatives to bonds. That pattern hasn’t held up in the last few days, as investors have been looking for relatively safe picks on the stock market.

U.S. crude oil rose 0.6% to $71.78 a barrel in New York. Brent crude, the standard for international oil prices, rose 0.4% to $80.78 a barrel in London.

Natural gas prices continued to surge as weather in the United States grew colder. They rose 2.6% to $3.24 per 1,000 cubic feet and have climbed almost 8% in October to reach their highest price since January.


Wholesale gasoline edged up 0.1% to $1.94 a gallon. Heating oil rose 0.2% to $2.33 a gallon.

In another sign investors were nervous about stocks, gold rose 0.7% to $1,230.30 an ounce and silver ticked up 0.6% to $14.73 an ounce. Copper fell 0.4% to $2.79 a pound.

The dollar fell to 111.88 yen from 112.01 yen. The euro rose to $1.1584 from $1.1563.

Global stock indexes have been struggling this year as investors move money to the United States and out of Europe and Asia in response to faster economic growth in the United States and rising trade tensions. Global markets’ losses the last few weeks have made it even worse.

The Hang Seng index in Hong Kong has fallen 22% since early January, meeting Wall Street’s definition of a bear market — a decline of at least 20% from a recent peak. A number of other indexes have fallen at least 10%, a drop known as a correction. Those include Germany’s DAX and South Korea’s Kospi, which both peaked in late January, and Britain’s FTSE 100, Spain’s Ibex and Italy’s FTSE MIB, which peaked in May.


5:40 p.m.: This article was updated with closing prices, context and analyst comment.

This article was originally published at 6:50 a.m.