Tech stocks lead a broad decline in the U.S. market
A slump in technology shares on Wednesday helped turn early gains in U.S. stock indexes into losses across industries, extending the market’s losing streak to a third day.
Investors sent the Dow Jones industrial average up 200 points in morning, then began dumping some big tech stocks. Apple fell 2.2 percent and Microsoft lost 1.5 percent.
By the end of the day, seven of the 10 industry sectors in the Standard and Poor’s 500 index fell. Suppliers of raw materials, the focus of aggressive selling in recent days, rose 3.1 percent as investors hunted for bargains.
“You’ve got two days of massive selling of oil and commodity companies, so perhaps some are oversold,” said Bryn Mawr Trust Chief Investment Officer Ernie Cecilia. He added, though, that they weren’t cheap enough yet for him to join in the buying.
The Dow index lost 75.70 points, or 0.4 percent, to 17,492.30. The S&P 500 gave up 15.97 points, or 0.8 percent, to 2,047.62. The Nasdaq composite dropped 75.38 points, or 1.5 percent, to 5,022.87.
Yahoo slumped after the struggling Internet company said it would scrap a spinoff of its big stake in the Chinese e-commerce giant Alibaba. The stock lost 45 cents, or 1.3 percent, to $34.40. Yahoo said it will instead explore breaking off the rest of its business into a new company.
Some of the biggest gainers were stocks that suffered big losses the day before. Freeport McMoRan, a miner that fell 7 percent on Tuesday, rose 3.7 percent, gaining 25 cents to close at $6.99.
Helping boost raw material stocks were news reports that two giant chemical companies, Dow Chemical and DuPont, were in talks to combine. Dow Chemical rose $6.07, or 11.9 percent, to $56.97. DuPont climbed $7.89, or 11.8 percent, to $74.49.
Oil drillers, which have been beaten down recently, also rallied. Exxon Mobil and Chevron each rose 1.3 percent, despite another drop in benchmark U.S. oil.
Bill Strazzullo, chief market strategist at Bell Curve Trading, said a recent slump in oil and other major commodities is signaling that the global economy is weak. That could mean more rocky days in the market.
“You got commodities in a death spiral, and that’s just not impacting the U.S., but the global economy,” he said. “Investors are taking off risk.”
Among other stocks making big moves Wednesday, Costco fell $9.15, or 5 percent, to $159.72 after reporting weaker earnings than analysts were expecting.
Benchmark U.S. crude slipped 35 cents to close at $37.16 a barrel in New York. Brent crude, the international standard, fell 15 cents to close at $40.11 a barrel in London. In other trading, wholesale gasoline rose 2.8 cents to close at $1.232 a gallon, heating oil fell two cents to $1.239 a gallon and natural gas fell 0.8 cent to $2.062 per 1,000 cubic feet.
U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.21 percent from 2.22 percent late Tuesday. The U.S. dollar fell to 121.24 yen from 123.05 yen. The euro rose to $1.1023 from $1.0890.
Previous and industrial metals futures closed broadly higher. Gold edged up $1.20 to $1,076.50 an ounce, silver rose seven cents to $14.19 an ounce and copper gained a penny to $2.07 a pound.
