Stocks wobbled Tuesday as large high-dividend stocks rose and smaller companies sank. Major indexes ended mostly higher. They were coming off big gains the day before.
Big healthcare companies including Johnson & Johnson rallied, as did telecommunications firms and household goods makers. Makers of steel and other materials skidded, and a steep loss for United Technologies pulled defense contractors lower.
Technology companies rose even though President Trump said he expects more tariffs on goods imported from China, some of which would hit computers and smartphones. Trump is scheduled to meet with Chinese President Xi Jinping during the Group of 20 summit in Argentina later this week.
“It is not unexpected that the administration would ramp up their threats moving into that meeting,” said Tracie McMillion, head of global asset allocation for Wells Fargo Investment Institute. She said trading will probably be volatile for the rest of the week, but stocks are likely to rise if the two sides are able to strike even a very general agreement.
The Standard & Poor’s 500 index rose 8.72 points, or 0.3%, to 2,682.17. The index jumped 1.6% Monday. The Dow Jones industrial average rose 108.49 points, or 0.4%, to 24,748.73. The Nasdaq composite inched up 0.85 of a point to 7,082.70; on Monday, it surged 2.1%.
With two months of volatility on investors’ minds and more likely to come, Wall Street gravitated toward traditionally safer, high-dividend stocks such as communications firms, utilities and consumer goods companies. Verizon advanced 2.5% to $60.65. Public Service Enterprise Group rose 1.5% to $54.29. Cigarette maker Altria Group rose 1.1% to $53.79 as tobacco companies recovered some of their recent losses.
Smaller companies, especially in heavy industry and retail, took losses. The Russell 2000 index of smaller-company stocks slid 13.10 points, or 0.9%, to 1,492.86.
Those companies made big gains at the end of 2017, when Republicans passed a corporate tax cut. The Russell 2000 set a record high in late August but is now down 2.8% for the year.
“Later in the [economic] cycle, the cost of borrowing impacts small businesses,” McMillion said. “Not being able to hire the labor that they need to continue to grow could be a factor in that as well.”
United Technologies slid 4.1% to $122.68 after saying late Monday that it will split into three companies now that it has finished its purchase of aviation electronics maker Rockwell Collins. The company’s aerospace and defense industry business is to keep the United Technologies name, while its Otis elevator business and Carrier air conditioner and building systems unit are to be spun off. Investors weren’t impressed with the company’s forecasts for Rockwell Collins. United Technologies also said it doesn’t expect to buy back any more of its stock during the breakup, which could take up to two years.
Other defense companies also lost ground. Northrop Grumman fell 2.1% to $260.34. Raytheon fell 1.7% to $171.67.
Spirit Airlines surged 15.3% to $58.76 after it forecast a big jump in revenue in the fourth quarter. Investors were hopeful that other airlines might see similar gains. Delta climbed 2.8% to $58.31. United Continental ticked up 1.8% to $93.38.
Trump told the Wall Street Journal late Monday that he expects to raise tariffs on $200 billion worth of Chinese imports Jan. 1. His administration recently imposed a 10% tax on those imports, and at the start of the year that’s scheduled to rise to 25%. Trump also threatened again to place tariffs on all remaining goods the U.S. imports from China.
The administration’s tariffs have driven up costs for many businesses, but consumers haven’t felt as much of a sting. Another round of tariffs on products such as laptops and computers would change that.
Apple slipped 0.2% to $174.24. Its stock has fallen 25% since early October, wiping out about $270 billion in value and leaving Apple and Microsoft essentially tied as the most valuable publicly traded companies in the world. Microsoft edged ahead a few times during the day, but at the close of trading, investors valued Apple at about $827 billion and Microsoft at $822 billion.
Microsoft rose 0.6% to $107.14. The company hasn’t done any worse than the rest of the stock market in October and November, and for technology companies, that’s an unusually good result.
Maxim Integrated Products climbed 4.2% to $55.60 on the news that the San Jose chipmaker will be added to the S&P 500 index Monday. It will take the place of Aetna, which is being bought by CVS.
Benchmark U.S. crude edged down 0.1% to $51.56 a barrel in New York. Brent crude, the international standard, slipped 0.4% to $60.21 a barrel in London.
Wholesale gasoline fell 1.5% to $1.42 a gallon. Heating oil fell 0.4% to $1.89 a gallon. Natural gas rose 0.4% to $4.26 per 1,000 cubic feet.
Bond prices edged up. The yield on the 10-year Treasury note fell to 3.06% from 3.07%.
Gold fell 0.7% to $1,213.40 an ounce. Silver fell 0.9% to $14.08 an ounce. Copper fell 1.7% to $2.71 a pound.
The dollar rose to 113.79 yen from 113.64 yen. The euro fell to $1.1296 from $1.1328.
3 p.m.: This article was updated with closing prices, context and analyst comment.
This article was originally published at 7:30 a.m.