Stock indexes barely budge: Tech and industrials’ gains offset losses elsewhere
Major U.S. stock indexes closed nearly flat Thursday, with gains by technology and industrial companies offsetting declines elsewhere in the market.
The Standard & Poor’s 500 index notched a small gain for the second straight day, and the Nasdaq composite rode a modest rise to a new all-time high. The Dow Jones industrial average lost ground for the third day in a row, weighed down by a steep drop in Travelers Cos. shares. Bond prices rose, sending yields lower.
Trading was choppy for much of the day after a sell-off in Asia, where concern about the potential effect of a deadly new virus outbreak dragged stock indexes in China down sharply. Fears that the coronavirus could spread, dampening tourism and economic growth, has weighed on global markets this week, driving up demand for U.S. government bonds and safe-play stocks.
Traders also had their eye on a mixed batch of company earnings reports, including encouraging quarterly results from American Airlines and Citrix Systems, and disappointing report cards from Travelers and Raymond James Financial.
“Today was driven a bit by earnings but also by the coronavirus fears,” said J.J. Kinahan, chief strategist at TD Ameritrade. “Asian markets had a really tough night, and that was our lead-in. That put a bit of extra pressure on the market coming in.”
The S&P 500 index inched up 3.79 points, or 0.1%, to 3,325.54. The index had been down as much as 0.6% earlier in the day.
The Dow slipped 26.18 points, or 0.1%, to 29,160.09. The Nasdaq gained 18.71 points, or 0.2%, to 9,402.48. The index, which is heavily weighted with technology stocks, previously hit a record high Friday.
The Russell 2000 index of smaller-company stocks rose 0.55 points, or less than 0.1%, to 1,685.01.
Excluding the Nasdaq, the major U.S. stock indexes are on track to end the week with a loss.
Bond prices rose. The yield on the 10-year Treasury fell to 1.73% from 1.77% late Wednesday.
Stocks got off to a shaky start after a sell-off in global markets as authorities worldwide stepped up measures to monitor and contain the virus. The central Chinese city of Wuhan, where the virus is concentrated, closed down its train station and airport Thursday to prevent people from entering or leaving the city.
The coronavirus has been confirmed in five countries: China, the U.S., Thailand, Japan and South Korea. More than 500 people have fallen sick and 17 have died from the illness, which can cause pneumonia and other severe respiratory symptoms.
A World Health Organization committee decided Thursday against declaring the outbreak a global emergency for now. Such a declaration can bring more money and other resources to fight a threat but can also trigger economically damaging restrictions on trade and travel in the affected countries, making the decision a politically fraught one.
The market regained some of its footing as the day went on and investors focused on the latest company earnings reports.
Technology stocks notched the biggest gains. Citrix Systems led all S&P 500 stocks, vaulting 7.8%, after the software company reported fourth-quarter earnings and revenue that topped Wall Street’s forecasts.
Industrial stocks also rose, helped by solid earnings from American Airlines Group. Strong travel demand resulted in record occupancy levels on its planes, though the airline noted it had to cancel about 10,000 flights during the fourth quarter because of the grounding of the Boeing 737 Max jets. Its stock climbed 5.4% and helped lift other airlines. Southwest Airlines gained 3.6% and Alaska Air Group rose 2.4%.
Real estate and utilities companies also notched gains as traders shifted money into safe-play sectors.
Healthcare stocks were the biggest losers. Edwards LifeSciences, which makes heart valves, dropped 4.8%.
Financial stocks, including insurers, also fell. Travelers Cos. slid 5.1%, while financial services firm Raymond James dropped 6.2% after falling short of profit forecasts.
Crude oil prices slumped and weighed on energy stocks. Pioneer Natural Resources dropped 2.9%.
V.F. Corp. slid 9.7% after the maker of Vans and Timberland shoes cut its profit forecast for the year because of weak fiscal third-quarter sales. The stock was the biggest decliner in the S&P 500.
Benchmark crude oil fell $1.15 to $55.59 a barrel. Brent crude oil, the international standard, dropped $1.17 to $62.04 a barrel. Wholesale gasoline fell 2 cents to $1.56 a gallon. Heating oil declined 1 cent to $1.79 a gallon. Natural gas rose 2 cents to $1.93 per 1,000 cubic feet.
Gold rose $9.30 to $1,564.60 an ounce, silver was unchanged at $17.77 an ounce and copper fell 4 cents to $2.73 an pound.
