Stocks Close With Modest Losses 11/21 15:51
Stocks closed modestly lower on Wall Street Thursday after a mostly listless
day of trading handed the market its third straight drop.
(AP) -- Stocks closed modestly lower on Wall Street Thursday after a mostly
listless day of trading handed the market its third straight drop.
Losses in technology stocks, companies that rely on consumer spending and
other sectors outweighed gains elsewhere in the market.
Energy sector stocks were the biggest winners, benefiting from another
pickup in crude oil prices. Health care and communication services companies
Investors have turned cautious this week amid concerns that the U.S. and
China will fail to make a trade deal before the year is over.
The world's largest economies have been negotiating a resolution to their
trade war ahead of new tariffs set to hit key consumer goods on Dec. 15.
Investors have been hoping for a deal before that happens, as the tariffs would
increase prices on smartphones, laptops and many common household goods.
"That Dec. 15 deadline on tariffs still weighs on the market," said Quincy
Krosby, chief market strategist at Prudential Financial. "The market needs a
sense that there won't be an escalation in the trade war."
The S&P 500 index dropped 4.92 points, or 0.2%, to 3,103.54. The Dow Jones
Industrial Average fell 54.80 points, or 0.2%, to 27,766.29.
The Nasdaq slid 20.52 points, or 0.2%, to 8,506.21. The Russell 2000 index
of smaller company stocks lost 7.65 points, or 0.5%, to 1,583.96.
Major stock indexes in Europe also finished lower.
The latest round of selling extended the losses for U.S. stocks this week.
The benchmark S&P 500 index is on track to snap a six-week winning streak.
Optimism that Washington and Beijing were nearing a "phase one" trade deal
helped pave the way for gains in the market in recent weeks, including a string
of all-time highs for the major stock indexes. Stocks have receded from those
highs the past few days as investors have grown more doubtful about a trade
The doubts have persisted even after an attempt by China's Commerce Ministry
to bat away rumors that the talks were in trouble. A ministry spokesman said
Beijing was committed to continuing discussions on core concerns. The Wall
Street Journal also reported that China's chief negotiator has called for more
Stocks are likely to remain choppy and risky as long as the trade war and
threat of new tariffs looms over Wall Street, said Barry Bannister, head of
institutional equity strategy at Stifel.
"We don't want to see tariffs on consumer goods that get passed on directly
to retail purchasers because they're the last leg on which the economy is
standing right now," Bannister said.
Bannister warned that the market could be in for a significant decline
before the end of the year if the U.S. and China can't make progress. He also
said the risk of a larger recession has not disappeared.
The resurgent trade worries have cut into some of the market's recent gains
this week, though the major stock indexes remain near their all-time highs.
"Markets need to pause, they need to consolidate," Krosby said. "And by just
being flat, by pulling back a little bit, that's actually ultimately healthy
for the market."
Technology stocks took some of the heaviest losses Thursday. Many chipmakers
and companies that make hardware rely on China for sales and supply chains.
Advanced Micro Devices slid 3.6% and Lam Research fell 3.7%.
Consumer product makers also fell broadly. Kraft Heinz dropped 2.7%.
Exxon Mobil rose 2.4%, part of a broad rally in energy stocks as the price
of U.S. crude oil climbed 2.8%. Benchmark crude oil rose $1.57 to settle at
$58.58 a barrel. Brent crude oil, the international standard, gained $1.57 to
close at $63.97 a barrel.
Bond prices fell. The yield on the 10-year Treasury rose to 1.78% from 1.74%
late Wednesday. The rise in bond yields, which drive up the interest rates
banks charge for mortgages and other loans, helped boost financial sector
stocks. Bank of America added 0.5%.
Traders welcomed a batch of deal-related news.
Tiffany jumped 2.6% following a report that LVMH would raise its bid for the
company. TD Ameritrade soared 16.9% after a report that Charles Schwab was in
talks to acquire it.
PayPal slipped 1.5% after saying it would buy Honey Science, which helps
people find coupons and discounts while they shop online.
Retailers continued to report a mixed batch of earnings. Macy's fell 2.3%
after cutting its profit and sales forecast. Investors rewarded Victoria's
Secret owner L Brands with a 10.1% gain after the company met Wall Street's
Several other well-known retailers will report earnings later Thursday,
including Nordstrom and Gap.
In other commodities trading, wholesale gasoline rose 4 cents to $1.70 per
gallon, heating oil climbed 5 cents to $1.94 per gallon and natural gas rose 1
cent to $2.57 per 1,000 cubic feet.
Gold fell $10.20 to $1,463.10 per ounce, silver fell 5 cents to $17.05 per
ounce and copper fell 3 cents to $2.62 per pound.
The dollar rose to 108.66 Japanese yen from 108.64 yen on Wednesday. The
euro weakened to $1.1059 from $1.1070.