VOL. 42 | NO. 5 | Friday, February 02, 2018
Losses for US stocks continue as industrials and banks slide
NEW YORK (AP) — U.S. stocks are lower Thursday morning as losses from the previous day continue. Major indexes are off about 1 percent. Banks, industrial and technology companies are faring the worst. Companies including Hanesbrands, Yelp and Roomba maker iRobot are down sharply following disappointing quarterly reports, but Twitter is soaring after it reported a quarterly profit for the first time. Bond prices are falling and yields are rising.
KEEPING SCORE: The Standard & Poor's 500 index shed 21 points, or 0.8 percent, to 2,659 as of 11 a.m. Eastern time. The Dow Jones industrial average lost 272 points, or 1.1 percent, to 24,621. Boeing and Caterpillar took some of the worst losses. The Nasdaq composite fell 63 points, or 0.9 percent, to 6,988. The losses were broad. Three stocks fell for every one that rose on the New York Stock Exchange.
Stocks have wavered between big gains and sharp losses over the last two days. The S&P 500 fell four of the previous five days, and is down 7.4 percent from the record high it set Jan. 26.
EARNINGS: Investors turned their attention to more fourth-quarter company earnings reports. While U.S. companies mostly did well at the end of 2018, several prominent companies had a disappointing finish to the year and they traded lower Thursday.
Underwear, T-shirt and sock maker Hanesbrands disclosed a smaller profit than investors expected, and its forecast for the current year didn't live up to analysts' estimates either. The company also said it will pay $400 million to buy Australian retailer Bras N Things. Its stock lost $1.96, or 8.9 percent, to $20.
IRobot also projected a smaller annual profit than Wall Street had hoped, and its stock gave up $24.18, or 27.5 percent, to $63.86.
Twitter climbed after it turned a profit for the first time, and its fourth-quarter revenue was better than expected. The stock rose $5.65, or 21 percent, to $32.56, the highest price for Twitter stock in two and a half years.
Viacom jumped $2.34, or 7.7 percent, to $32.85 following its quarterly report. The owner of Paramount Pictures, Nickelodeon and MTV said it formed a special committee to consider a possible deal with former corporate sibling CBS.
SPECIAL DELIVERY: Online delivery company GrubHub soared after it announced a partnership with Yum Brands, the parent of Taco Bell and KFC. GrubHub will provide the delivery people and technology to let people order food from those restaurants. GrubHub jumped $19.46, or 27.8 percent, to $89.37, while Yum Brands dipped 77 cents, or 1 percent, to $79.36.
Amazon will start offering delivery from its Whole Foods grocery stores, a move investors have expected since Amazon bought the company in June. Amazon Prime subscribers will be able to get groceries delivered in two hours. Amazon slid $11.760 to $1,405.08.
LAGGING: Technology companies, which have dominated the market over the past year, struggled again. Microsoft fell $1.10, or 1.2 percent, to $88.51 and chipmaker Intel declined $1.03, or 2.3 percent, to $44.18. Salesforce.com retreated $2.02, or 1.8 percent, to $108.03. Among financial companies, JPMorgan Chase lost $1.59, or 1.4 percent, to $111.28 and insurer Allstate skidded $2.81, or 2.9 percent, to $94.07.
BONDS: Bond prices headed lower. The yield on the 10-year Treasury note rose to 2.87 percent from 2.84 percent.
High-dividend stocks including phone companies fell. Those stocks are often seen as substitutes for bonds because they tend not to fluctuate that much in price and provide steady income. Those stocks fall out of favor when bond yields rise, as they have been for the past few months, and many expect the trend to continue. The yield on the 10-year note was as low as 2.04 percent as recently as September.
CURRENCIES: The dollar edged up to 109.43 yen from 109.42 yen. The euro fell to $1.2259 from $1.2276.
ENERGY: After a sharp loss Wednesday, benchmark U.S. crude lost 40 cents to $61.39 a barrel in New York. Brent crude, the international standard for oil prices, gave up 37 cents to $65.14 per barrel in London.
OVERSEAS: Stocks in Europe declined and bond yields increased after the Bank of England said could raise interest rates in coming months because of the strong global economy. That also sent the pound higher. Britain's FTSE 100 fell 1 percent, as did the French CAC 40. Germany's DAX declined 1.4 percent.
In Tokyo the Nikkei 225 index rose 1.1 percent. South Korea's Kospi gained 0.5 percent and the Hang Seng of Hong Kong rose 0.4 percent.
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jayt
Youkyung Lee in Seoul and Kelvin Chan in Hong Kong contributed to this report.