US Stock Indexes Close Slightly Lower 04/24 16:30
U.S. stocks closed slightly lower Wednesday as the market gave back some of
its gains a day after the S&P 500 and Nasdaq hit record highs.
(AP) -- U.S. stocks closed slightly lower Wednesday as the market gave back
some of its gains a day after the S&P 500 and Nasdaq hit record highs.
Energy stocks led the modest slide as crude oil prices fell after a
three-day rally. Communications companies also helped pull the market lower,
offsetting gains in real estate and other sectors. Bond prices rose as traders
took a more defensive approach.
Stocks wavered between small gains and losses through much of the day as
investors continued to wade through a steady flow of corporate earnings.
Analysts have been expecting a contraction in first-quarter corporate profits,
but the results so far have been mostly solid.
That trend continued Wednesday with strong reports from e-commerce company
eBay, industrial giant Caterpillar and health insurer Anthem.
"The pace of earnings beats is at a very nice level, certainly exceeding
diminished expectations," said Eric Wiegand, senior portfolio manager for
Private Wealth Management at U.S. Bank. "The strength of the dollar has been,
perhaps, a little bit of a weight on markets today."
The S&P 500 index fell 6.43 points, or 0.2%, to 2,927.25. The benchmark
index closed at a record high on Tuesday. The Dow Jones Industrial Average
dropped 59.34 points, or 0.2%, to 26,597.05. The Nasdaq composite lost 18.81
points, or 0.2%, to 8,102.01. The index was also coming off a record high close.
Small-company stocks fared better than the rest of the market. The Russell
2000 index picked up 3.04 points, or 0.2%, to 1,588.13.
Despite the overall decline in the major indexes, slightly more stocks rose
than fell on the New York Stock Exchange. Major European stock indexes finished
Bond prices rose. The yield on the 10 year Treasury note fell to 2.52% from
2.57% late Tuesday.
The U.S. stock market mounted a strong recovery this year after finishing
2018 in a steep slump fueled by fears of recession, an escalating trade war
between the U.S. and China, and concern the Federal Reserve was moving too
aggressively to raise interest rates.
Those worries have been mostly quelled this year amid greater confidence in
the economy and reassurances that the Fed is unlikely to raise interest rates
Traders have also been more confident in the prospects for corporate
earnings growth as companies have begun reporting solid first quarter results.
A little more than a quarter of S&P 500 companies have issued their first
quarter report cards so far, resulting in overall earnings growth of 2.4%.
Still, analysts are forecasting that earnings will be down 3% by the time all
the S&P 500 companies deliver their results. That would be the first decline
since the spring of 2016.
Energy stocks fell more than the 10 other S&P 500 sectors, losing 1.9%.
National Oilwell Varco led the way lower, shedding 5.1%.
The slide came as the price of U.S. crude oil snapped a three-day winning
Benchmark U.S. crude fell 0.6% to settle at $65.89 per barrel. Oil had been
climbing recently since dropping below $43 in late December. Brent crude rose
0.1% to $74.57 per barrel.
Anadarko Petroleum bucked the energy sector's broad slide as the oil and gas
exploration and production company became the focus of a bidding war by two of
the oil industry's largest companies.
Occidental Petroleum is hoping to beat a rival bid made by Chevron earlier
this month. The two companies are hoping to secure their position in the
oil-rich Permian Basin. Anadarko vaulted 11.6%. Occidental dropped 0.6%, while
Chevron fell 3.1%.
The latest wave of company earnings reports included some disappointing
results, which weighed on stocks.
AT&T dropped 4.1% after the telecommunications giant's first quarter revenue
fell short of forecasts, due in part to a bid decline in premium video
IRobot plunged 23.1% after the robotics company's revenue fell short of Wall
Street forecasts. The company, which is best known for its robotic Roomba
vacuum, beat profit forecasts for the quarter and gave investors solid guidance
for the year, but it wasn't enough to overcome disappointing revenue growth.
Other companies got a boost from their latest quarterly snapshots.
EBay rose 5% after it raised its full-year sales and profit forecast. Active
buyers grew by 4% during the first quarter, pushing revenue and profit beyond
Wall Street forecasts.
Flir Systems climbed 5.5% after the imaging and surveillance systems company
turned in better-than-expected first quarter results and a solid forecast.
SAP soared to an all-time high after activist investor Elliott Management
revealed a $1.3 billion investment in the German software company on the same
day SAP reported solid first quarter results. SAP's U.S.-listed stock jumped
In other commodities trading, wholesale gasoline inched 0.1% lower to $2.13
per gallon. Heating oil dropped 0.9% to $2.10 per gallon. Natural gas gained
0.3% to $2.46 per 1,000 cubic feet.
Gold rose 0.5% to $1,279.40 per ounce, silver added 0.8% to $14.92 per ounce
and copper picked up 0.6% to $2.91 per pound.
The dollar rose to 112.35 Japanese yen from 111.83 yen late Tuesday. The
euro weakened to $1.1143 from $1.1215.