By ALEX VEIGA AP Business Writer
Technology companies led stocks lower on Wall Street in afternoon trading Tuesday, as investors turned away from large multinationals in favor of smaller, U.S.-focused companies for the second straight day.
Several big names helped pull down the tech sector, including Microsoft, which slid 1.7%, and payment processors Visa and Mastercard, which dropped 3.8% and 4.5%, respectively.
The pullback in technology stocks contrasts with the last few weeks, when the sector drove much of the market’s gains. A mix of consumer product makers and consumer-focused stocks also fell. General Mills lost 2.4% and Starbucks slid 4.7%.
Rising bond yields helped nudge bank stocks higher. Bank of America rose 2.4%, Goldman Sachs gained 1.4% and State Street jumped 8.4%. The yield on the 10-year Treasury rose to 1.72% from 1.62% late Monday, a big move.
Energy and industrial companies notched solid gains. Schlumberger rose 3.2% and Deere & Co., rose 3.5%.
Investors continued to flock to smaller-company stocks. They’re seen as being better shielded from the fallout of the costly trade war between the U.S. and China than large multinationals.
Among the small-cap gainers were ABM Industries, which rose 3.9% and Spectrum Pharmaceuticals, which jumped 12.7%.
The broader market has been gaining ground for two weeks as investors remain confident in the strength of the economy, despite the lingering trade war between the U.S. and China. The feud between the world’s two largest economies has been injecting doses of volatility into the market as both sides escalate and then pull back. Recent plans for trade talks to resume in October raised some hope on Wall Street for a resolution.
Meanwhile, investors continue to watch the steady flow of economic data for a clearer picture of the U.S. economy’s health. Recent reports have been a mixed bag, including Tuesday’s Labor Department data on a slip in job openings along with a slight rise in hiring in July.
The Labor Department will report the latest consumer price index figures on Thursday and the Commerce Department will report August retail sales data on Friday. Economists continue to expect the Federal Reserve to cut interest rates at its meeting next week to help maintain U.S. economic growth.
KEEPING SCORE: The S&P 500 index was down 0.4% as of 3:36 p.m. Eastern time. The Dow Jones Industrial Average dropped 26 points, or 0.1%, to 26,810. The Nasdaq slid 0.5%. The Russell 2000 index of smaller-company stocks was up 0.9%.
Major stock indexes in Europe finished higher. Markets in Asia were mixed.
VIDEO STREAMING WARS: Shares in operators of video streaming services were mixed following Apple’s announcement Tuesday afternoon that it will charge $5 per month for its own service, dubbed Apple TV Plus. The service will be available in 100 countries at launch on Nov. 1.
Apple was unveiling its latest offerings, including new iPad, Apple Watch and iPhone models, during a live-streamed online product showcase. Its stock edged 0.2% higher. Netflix fell 3%. Disney, which controls Hulu and is set to debut its Disney Plus streaming service later this year, dropped 2.8%. Amazon lost 1%.
BREAKFAST BLUES: Wendy’s slumped 10.5% after the fast-food chain cut its profit growth forecast because of plans to expand its breakfast options nationwide. It plans to invest $20 million this year in the expansion and expects up to 6.5% profit growth instead of 7% growth.
ENGINE TROUBLE: Ford fell 1.8% after Moody’s cut the automaker’s credit rating to “junk.”
Moody’s is concerned that the company will be weighed down by weak earnings as it restructures. The move by Moody’s makes it more costly for Ford to borrow money.
DISCOURAGING OUTLOOK: HD Supply Holdings slid 4.2% after the industrial distributor gave investors a disappointing profit and revenue forecast for the year.
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AP Business Writer Damian J. Troise contributed.
Author: News Desk
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