Stocks take biggest losses in nearly a month
NEW YORK » U.S. stocks took their biggest loss in almost a month today as investors worried about the health of the U.S. economy and sold shares in retailers and car companies. Machinery companies also fell and the price of oil continued to decline.
Travel companies fell after cruise line operator Royal Caribbean cut its projections for the year, and automakers and suppliers fell after car companies reported lower U.S. sales for the month of July. Banks finished lower as investors worried about the health of banks in Europe. While stocks set all-time records as recently as July 22, they’ve been trading in a very narrow range for the last few weeks. Since stocks aren’t making big gains, investors are sensitive to signs of trouble for the U.S. economy, like weaker sales of autos or last week’s disappointing GDP report.
“The market had just rallied… and now it’s sort of paused,” said Jim Paulsen, the chief investment strategist for Wells Capital Management. “Any weak reports get magnified,” he said.
The Dow Jones industrial average fell 90.74 points, or 0.5 percent, to 18,313.77. The Standard & Poor’s 500 index lost 13.81 points, or 0.6 percent, to 2,157.03. The Nasdaq composite slid 46.46 points, or 0.9 percent, to 5,137.73. The Dow has fallen for seven days in a row, and today was the worst day for U.S. stocks since July 5.
Auto companies reported lower U.S. sales in July as a heatwave kept buyers at home. General Motors said its sales fell 2 percent and Ford said sales fell 3 percent. After six straight years of growth, auto sales have reached record levels and are starting to plateau. GM stock shed $1.37, or 4.4 percent, to $29.93 and Ford lost 54 cents, or 4.3 percent, to $11.94. Car retailers CarMax and AutoNation and supplier BorgWarner all fell.
Cruise line operator Royal Caribbean cut its forecasts for the year as the strong dollar continues to hurt its results. That left Royal Caribbean’s stock down $4.51, or 6.3 percent, to $67.35. Other consumer companies like retailers Nordstrom and Kohl’s and office supply chain Staples all stumbled.
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Citigroup retreated 43 cents, or 1 percent, to $42.99 and Morgan Stanley fell 50 cents, or 1.8 percent, to $28. Bank stocks in Europe tumbled for the second day in a row. The losses extended to banks that were effectively given a clean bill of health by the European Banking Authority in last Friday’s stress tests.
Industrial and transport companies struggled. Delta said a revenue measurement fell in July and its stock lost $3.09, or 7.8 percent, to $36.39 and American Airlines lost $2.09, or 5.9 percent, to $33.51. Emerson Electric, which makes valves and process controls systems, posted disappointing quarterly results. It gave up $2.75, or 4.9 percent, to $53.03. Tech stocks also lost ground. Apple fell $1.57, or 1.5 percent, to $104.48 and electronic storage company Seagate Technology slid $1.78, or 5.5 percent, to $30.65 despite a solid quarterly report.
Oil prices continued to drop, extending a slide that has lasted more than two weeks. Benchmark U.S. crude fell 55 cents, or 1.4 percent, to $39.51 in New York. U.S. crude hadn’t closed under $40 a barrel since April 8. Brent crude, which is used to price international oils, sank 34 cents to $41.80 a barrel London.
Drugstore chain and pharmacy benefits manager CVS Health raised its 2016 forecasts as specialty drug prices kept rising and deals for Omnicare and Target’s pharmacy and clinic unit boosted its results. Its stock rose $4.57, or 4.9 percent, to $98.06.
Discovery Communications, the company behind TLC, Animal Planet and other channels, reported profit that was larger than analysts expected as its U.S. business strengthened. Its stock gained $1.65, or 6.7 percent, to $26.42.
In other energy trading, wholesale gasoline rose 1 cent to $1.31 a gallon. Heating oil held steady at $1.26 a gallon. Natural gas fell 4 cents to $2.73 per 1,000 cubic feet.
The price of gold rose $13, or 1 percent, to $1,372.60 an ounce, and silver jumped 20 cents, or 1 percent, to $20.70 an ounce. Copper added 1 cent to $2.21 a pound.
Germany’s DAX and France’s CAC 40 both lost 1.8 percent. Britain’s FTSE 100 fell 0.7 percent. Japan’s Nikkei 225 lost 1.5 percent. While the Japanese government approved a new economic stimulus package worth about $275 billion, investors were skeptical the measure will work. South Korea’s Kospi lost 0.5 percent to 2,019.70. China’s Shanghai Composite Index edged up 0.6 percent.
Bond prices fell. The yield on the 10-year Treasury note edged up to 1.55 percent from 1.52 percent. The dollar fell to 100.88 yen from 102.35 yen and the euro rose to $1.1227 from $1.1169.
One response to “Stocks take biggest losses in nearly a month”
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I’m not sure that I agree with the AP analysis. Looking at my portfolio (obviously, a rather subjective sample) it seems that major investors were taking a bit of profit after a really high performing week and leaving securities’ prices mostly quite a bit higher than a month ago. (market behavior isn’t always about doom and gloom)