Slide In Banks, Energy Firms Weighs On US Stock Indexes
U.S. stocks capped another day of listless trading with a slight loss Thursday as a slide in banks and industrial companies offset solid gains for the technology sector.
Homebuilders also declined following new data showing sales of new U.S. homes slumped in July. U.S. crude oil prices also ended essentially flat.
Investors had their eye on the latest developments in the U.S.-China trade dispute as both nations held their first high-level talks in two months. Traders also were looking ahead to Friday’s gathering of central bankers, including Federal Reserve Chairman Jerome Powell, in Jackson Hole, Wyoming, an annual symposium that has often generated market-moving news.
“It’s been a fairly quiet day,” said Paul Springmeyer, head of investments at U.S. Bank Wealth Management. “There’s obviously some reservation about what’s going to come out from Jackson Hole, from Chairman Powell.”
The S&P 500 fell 4.84 points, or 0.2 percent, to 2,856.98. The Dow Jones Industrial Average slid 76.62 points, or 0.3 percent, to 25,656.98. The Nasdaq composite lost 10.64 points, or 0.1 percent, to 7,878.46. The Russell 2000 index of smaller-company stocks gave up 5.49 points, or 0.3 percent, to 1,717.05.
Stocks spent much of the day hovering just below their prior day closing levels.
Markets showed little reaction to the latest round of dueling tariffs between the U.S. and China. The countries imposed 25 percent tariffs on $16 billion of each other’s goods Thursday, including automobiles and factory equipment. The increases were announced previously.
Beijing has rejected U.S. demands to scale back technology development plans that its trading partners say violate Chinese market-opening pledges and that American officials worry might erode the United States’ industrial leadership.
Investors came into this week feeling cautiously optimistic that the talks may lead to an end to the U.S.-China trade dispute. The market has mostly shrugged off the trade uncertainty in recent weeks, focusing instead on another strong quarter of corporate earnings growth. Earnings at S&P 500 companies have surged 23 percent in the first half of this year versus the same period a year earlier, according to S&P Global Market Intelligence.
“The market is waiting to see the effect of the tariffs,” said JJ Kinahan, chief market strategist for TD Ameritrade. “It’s hard to argue what’s going on with earnings.”
Of more immediate interest for the market is Friday’s annual gathering of central bankers. Powell was scheduled to deliver a keynote speech that traders are sure to scrutinize for signs of Fed views on Turkey’s currency crisis and U.S.-China trade tensions. If Powell sounds confident, investors would likely conclude the Fed will keep gradually raising rates.
Banks and other financial stocks took some of the biggest losses Thursday. Charles Schwab declined 1.5 percent to $50.17. Industrial stocks also fell. Caterpillar lost 2 percent to $136.79.
New housing data also weighed on stocks. The Commerce Department said sales of new U.S. homes slumped 1.7 percent in July, the second monthly decline in a row. Toll Brothers led a slide in homebuilder shares, losing 2.8 percent to $37.29.
“The backbone of the progress we’ve seen this year so far in the market really is an indication of how strong the economy is in general,” Springmeyer said. “Housing has probably been the one single piece of economic information to come out recently that has been somewhat disappointing.”
Hormel Foods fell 3.1 percent to $37.33 after the Spam maker cut its sales outlook, partly because of uncertain trade conditions. Other packaged foods companies also declined. J.M. Smucker lost 0.9 percent to $104.45. Campbell Soup slid 1.5 percent to $40.61.
Investors bid up shares in companies that delivered solid quarterly results or outlooks.
Synopsys climbed 6.4 percent to $100.75 after the maker of software used to test and develop chips topped Wall Street expectations in the third quarter.
Williams-Sonoma’s latest results also impressed analysts. Shares in the home furnishings and cookware company jumped 16.1 percent to $72.66.
Technology companies led the gainers. Advanced Micro Devices vaulted 6.7 percent to $22.29.
Benchmark U.S. crude settled essentially flat at $67.83 per barrel in New York. Brent crude, used to price international oils, dipped 0.1 percent to $74.73 per barrel in London.
Bond prices were little changed. The yield on the 10-year Treasury held steady at 2.82 percent.
The dollar rose to 111.28 yen from 110.57 yen late Wednesday. The euro weakened to $1.1536 from $1.1589.
Gold fell 0.8 percent to $1,194 an ounce. Silver slid 1.4 percent to $14.54 an ounce. Copper dropped 0.6 percent to $2.68 a pound.
In other energy futures trading, heating oil rose 0.3 percent to $2.18 a gallon. Wholesale gasoline fell 0.4 percent to $2.06 a gallon. Natural gas gained 0.3 percent to $2.96 per 1,000 cubic feet.
Major indexes in Europe finished essentially flat. Germany’s DAX dropped 0.2 percent while the CAC 40 in France was little changed. London’s FTSE 100 slipped 0.1 percent.
In Asia, Tokyo’s Nikkei 225 closed 0.2 percent higher, while Hong Kong’s Hang Seng lost 0.5 percent. Seoul’s Kospi gained 0.4 percent.
Copyright 2018 The Associated Press.