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VOL. 43 | NO. 28 | Friday, July 12, 2019
Stock indexes end lower, breaking a 5-day winning streak
NEW YORK (AP) — Stocks ended a five-day winning streak on Tuesday as investors cautiously assessed the first big round of corporate earnings reports.
Technology companies fared the worst, weighed down by a 1.3% drop by Microsoft and a 1.9% slide from Intel.
Johnson & Johnson led health care stocks lower with a drop of 1.6%. The health care and pharmaceutical company's full-year profit forecast remained mostly below analysts' projections.
Financial stocks gave up early gains and turned mostly lower, although Goldman Sachs and JPMorgan Chase rose. Energy companies also fell broadly.
Major indexes were mixed for much of the morning and turned lower at midday after President Donald Trump said: "We have a long way to go on tariffs with China."
The S&P 500 fell 10.26 points, or 0.3%, to 3,004.04. That marks the first decline in the benchmark index after five days of gains.
The Dow Jones Industrial Average fell 23.53 points, or 0.1% to 27,335.63. The Nasdaq composite fell 35.39 points, or 0.4%. to 8,222.80.
Small-company stocks rose slightly. The Russell 2000 index rose 0.17 point to 1,562.
A surprisingly good retail sales report for June had little impact on consumer product makers, though it did help push bond prices lower. The yield on the 10-year Treasury rose to 2.12% from 2.09% late Friday.
Industrial companies fared the best. JB Hunt Transport Services jumped 5.6% after the company beat Wall Street's second quarter profit forecasts. The trucking and logistics company also told investors that it expects volume will pick up in the second half of the year. Several other trucking and cargo-related companies also made gains. Ryder System rose 3.7%, Old Dominion rose 3.2% and Union Pacific rose 1.4%.
The latest round of corporate financial reports ramps up this week and investors have low expectations. Wall Street is forecasting a 2.6% drop in profit for S&P 500 companies. It is set to be the first back-to-back quarterly decline in three years.
Investors are looking for reasons to remain cautious as companies release results and give forecasts for the remainder of the year, said Jack Ablin, chief investment officer for Cresset Wealth management.
It's still early to tally results, but so far the share of companies beating profit forecasts has been high while many are reporting revenue shortfalls.
"That certainly doesn't bode well for growth in the second half," he said.
Domino's Pizza shed 8.7% after the pizza chain fell far short of Wall Street forecasts for a key sales measure during the second quarter. Arrow Electronics fell 1.8% after the company slashed its profit forecast for the second quarter because of weak demand.
Blue Apron surged 35.5% after the meal-kit company said it will start offering recipes with Beyond Meat's plant-based food. The company will start offering the options in August. Despite the surge, Blue Apron is still down more than 90% from its initial public offering two years ago.
The influx of earnings reports are coming in ahead of a highly anticipated Federal Reserve meeting at the end of the month. Wall Street expects the central bank to raise interest rates to help secure U.S. economic growth threatened by a trade war with China.
Investors are going to pay close attention to any second-half forecasts as companies continue to deal with trade uncertainties and the impact they could have on investments and expansion.
Benchmark U.S. crude fell $1.96 to settle at $57.62 per barrel. Brent crude, the international standard, lost $2.13 to $64.35 a barrel. Natural gas dropped 10 cents to $2.31 per 1,000 cubic feet, heating oil fell 5 cents to $1.90 per gallon and wholesale gasoline lost 4 cents to $1.89 per gallon.
The price of gold edged down $2.30 to $1,411.20 an ounce, silver rose 31 cents to $15.60 an ounce and copper fell 1 cent to $2.69 a pound.
The dollar rose to 108.34 Japanese yen from 107.90 late Friday. The euro fell to $1.1206 from $1.1259, and the British pound fell to $1.2406 from $1.2520.