US Stock Indexes Close Slightly Lower; Oil Prices Slide
Energy companies led U.S. stock indexes slightly lower Monday as the price of crude oil fell.
Real estate, phone companies and other high-dividend stocks did better than the rest of the market as bond yields headed lower, making those sectors more appealing to investors seeking income.
Investors focused on the latest batch of company earnings and deal news. They also had their eye on Washington, where President Donald Trump reaffirmed plans to slash regulations on businesses and tax foreign goods entering the country.
“There was that huge rally postelection and things really were running on optimism,” said Lisa Kopp, head of traditional investments at U.S. Bank Wealth Management. “What you’re seeing now is people coming back to the idea that the policies aren’t exactly clear … and (Trump’s) ability to actually push everything through exactly the way he wants is uncertain.”
The Dow Jones industrial average fell 27.40 points, or 0.1 percent, to 19,799.85. The Standard & Poor’s 500 index slid 6.11 points, or 0.3 percent, to 2,265.20. The Nasdaq composite index lost 2.39 points, or 0.04 percent, to 5,552.94. The Russell 2000, which tracks smaller companies, gave up 4.01 points, or 0.3 percent, to 1,347.84.
The major stock indexes were down slightly early Monday and veered little throughout the day as investors sized up company news and developments out of Washington.
At an early White House meeting with business leaders, Trump repeated a campaign promise to cut regulations by at least 75 percent. He also said there would be advantages to companies that make their products in the U.S., suggesting he will impose a “substantial border tax” on foreign goods entering the country.
Trump also signed a memorandum announcing the United States’ intention to withdraw from the multi-nation trade agreement known as the Trans-Pacific Partnership, and said he would renegotiate the North American Free Trade Agreement.
Companies that issued results or outlooks that fell short of Wall Street’s forecasts put traders in a selling mood.
McDonald’s fell 0.7 percent after the world’s biggest hamburger chain reported a fourth-quarter drop in sales at established U.S. locations. The decline snapped a streak of five quarters of increases. The stock shed 88 cents to $121.38.
Halliburton slid 2.9 percent after the provider of oil and gas drilling services warned of weaker demand in markets outside North America and its revenue missed forecasts. The stock shed $1.65 to $54.80.
Corporate deal-related news also moved some stocks.
Kate Spade climbed 3.6 percent after Bloomberg News reported that the handbag maker has attracted takeover interest from Coach, Michael Kors and international companies. Kate Spade rose 64 cents to $18.40.
Sprint gained 2.8 percent following news the mobile phone carrier is buying a 33 percent stake in Tidal, the music streaming service owned by artists including Jay-Z. The stock added 25 cents to $9.18.
Aetna fell 2.7 percent after a federal judge rejected the health insurer’s plan to buy rival Humana for about $34 billion. Aetna said it is reviewing the opinion and is considering an appeal. Aetna’s stock dropped $3.33 to $119.20.
Meanwhile, Qualcomm fell 12.7 percent on news that Apple is suing the maker of semiconductors, one of its major suppliers, for $1 billion in a patent fight. Qualcomm was the biggest decliner among companies in the S&P 500 index, sliding $8 to $54.88.
The slide in crude prices weighed on the energy sector, which fell 1.1 percent. Oil and gas rig operator Transocean slumped 55 cents, or 3.6 percent, to $14.76.
Benchmark U.S. crude fell 47 cents, or 0.9 percent, to close at $52.75 per barrel in New York. Brent crude, used to price international oils, slid 26 cents, or 0.5 percent, to close at $55.23 per barrel in London.
Major global stock markets mostly fell amid concerns that the Trump administration will pursue trade protectionism policies.
Germany’s DAX slid 0.7 percent, while France’s CAC-40 fell 0.6 percent. London’s FTSE 100 gave up 0.7 percent.
In Asia, a report showed that China’s economic growth ticked up in the final quarter of 2016, but the full-year expansion was the weakest in three decades. Hong Kong’s Hang Seng was unchanged. Tokyo’s Nikkei 225 fell 1.3 percent.
The 10-year Treasury yield slid to 2.40 percent from 2.47 percent late Friday. Yields had generally been climbing since Election Day on expectations that a Trump administration would spur more inflation and economic growth.
In currency markets, the dollar declined to 113 yen from 114.31 yen Friday. The euro rose to $1.0746 from $1.0707.
Among metals, the price of gold gained $10.70, or 0.9 percent, to $1,215.60 an ounce. Silver added 15 cents, or 0.9 percent, to $17.19 an ounce. Copper rose 2 cents to $2.65 a pound.
In other energy trading, wholesale gasoline was little changed at $1.57 a gallon, while heating oil slipped 2 cents to $1.63 a gallon. Natural gas futures rose 4 cents, or 1.2 percent, to $3.24 per 1,000 cubic feet.