Stocks Post First Loss of Week 04/19 15:45
Losses among technology and consumer products companies weighed on U.S.
stocks Thursday, snapping a three-day winning streak for the market.
(AP) -- Losses among technology and consumer products companies weighed on
U.S. stocks Thursday, snapping a three-day winning streak for the market.
Banks bucked the trend, rising along with bond yields. Energy companies also
eked out a slight gain, despite a late-afternoon downturn in oil prices. The
broad market slide came as investors pored over the latest corporate quarterly
"The earnings were a little bit disappointing today and we're just really
seeing, especially within the tech sector, follow-through on some of the big
names that have reported disappointing numbers in some key spaces," said
Lindsey Bell, an investment strategist at CFRA Research.
The S&P 500 index fell 15.51 points, or 0.6 percent, to 2,693.13. The Dow
Jones industrial average slid 83.18 points, or 0.3 percent, to 24,664.89. The
drop knocked the blue chip average slightly into the red for the year.
The Nasdaq composite lost 57.18 points, or 0.8 percent, to 7,238.06. The
Russell 2000 index of smaller-company stocks gave up 9.74 points, or 0.6
percent, to 1,573.82.
The major indexes were headed lower from the get-go as investors looked over
the latest corporate earnings. Disappointing results from Philip Morris
International and Procter & Gamble helped pull the market lower early on.
Philip Morris disclosed weak quarterly sales and said sales of its iQos
device in Japan were slower than expected. The stock was the biggest decliner
in the S&P 500, sinking 15.6 percent to $85.64. That's the tobacco company's
worst single-day loss of all time.
Procter & Gamble declined 3.3 percent to $74.95 despite posting results that
topped Wall Street's forecasts. The consumer products company reported a flat
third-quarter profit and President and CEO David Taylor said the company is
facing a challenging "macro environment" and that markets that it operates
within are being transformed.
Technology stocks, still the biggest gainers this year, weighed on the
market. Companies in the computer chip business were big decliners for the
second day in a row. Lam Research, which makes chip-making equipment, led the
slide, dropping 6.6 percent to $190.39.
Qualcomm slid 4.8 percent to $52.57 after the Chinese government said it
still has concerns about the company's deal to buy NXP Semiconductors. Qualcomm
withdrew one proposal for the deal Monday and submitted another.
Financial analysts are forecasting the strongest growth in seven years for
S&P 500 companies, partly because of a resurgent global economy, but also
because of expectations that last year's corporate tax cut will have on
corporate balance sheets.
Roughly 10 percent of the companies in the S&P 500 have released quarterly
results so far. And most have reported earnings and sales that beat financial
analysts' forecasts. But that hasn't necessarily translated into gains for
On average, the S&P 500 companies that have reported earnings and revenue
that topped Wall Street's expectations saw their share price decline 5 percent
on the day they released their results, Bell said.
"A lot of people had high expectations for the first quarter, as far as
earnings results go, but it wasn't really reflected in stock prices,
necessarily," Bell said, noting that investors appear to be unimpressed by the
forecasts that management teams are giving for coming quarters.
Some corporate report cards did impress investors.
American Express jumped 7.6 percent to $102.37 after the credit card issuer
reported a big quarterly profit thanks to strong customer spending and a lower
Rising bond yields helped push bank shares higher. When bond yields rise,
they drive up interest rates on mortgages and other loans, which can translate
into bigger profits for banks. Bank of New York Mellon gained 5.7 percent to
The yield on the 10-year Treasury rose to 2.92 percent from 2.88 percent
late Wednesday. That's the highest level since February.
Benchmark U.S. crude gave up early gains, slipping 18 cents to settle at
$68.29 a barrel on the New York Mercantile Exchange. Brent crude, used to price
international oils, added 30 cents to close at $73.78 per barrel in London.
Gold fell $4.70 to $1,348.80 an ounce. Silver slipped a penny to $17.24 an
ounce. Copper dropped 3 cents to $3.13 a pound.
The dollar rose to 107.41 yen from 107.26 yen on Wednesday. The euro fell to
$1.2337 from $1.2377.
Indexes in Europe closed mostly higher. Germany's DAX slipped 0.2 percent,
while France's CAC 40 rose 0.2 percent. Britain's FTSE 100 added 0.2 percent.
Major indexes in Asia finished higher. Japan's benchmark Nikkei 225 index
rose 0.6 percent and South Korea's Kospi added 0.4 percent. Hong Kong's Hang
Seng jumped 1.3 percent. Australia's S&P/ASX 200 gained 0.6 percent. Shares
also rose in Taiwan and Southeast Asia.