Stocks fall as tech shares slide; oil rises – Los Angeles Times

This post was originally published on this site

Technology companies led a slide in U.S. stocks Thursday as the market gave up some of its gains from the day before. Utilities, real estate companies and other high-dividend stocks fell as bond yields rose. Banks were up the most after the Federal Reserve said they can buy back more stock and raise their dividends. Energy stocks rose as oil prices headed higher.

KEEPING SCORE: The Standard & Poor’s 500 index fell 20 points, or 0.8%, to 2,420 as of 12:44 p.m. EDT. The Dow Jones industrial average slid 158 points, or 0.7%, to 21,296. The Nasdaq composite sank 97 points, or 1.6%, to 6,137. The Russell 2000 index of small-company stocks gave up 13 points, or 1%, to 1,411. The stock market was coming off its biggest gain in two months.

THE QUOTE: “European shares were down, and that’s certainly giving a little bit of pause for concern,” said Eric Wiegand, a senior portfolio manager with Private Wealth Management at U.S. Bank. “Investors, ourselves included, are anxious to get into earnings season a couple of weeks from now.”

ECONOMIC SNAPSHOT: The Commerce Department said that the nation’s gross domestic product, the broadest measure of economic health, increased at an annual rate of 1.4% in the first quarter. That’s better than the previous estimate of 1.2% and double the initial estimate of 0.7%. The upgrade reflects newfound strength in consumer spending and exports.

TECH SLIDE: Technology companies continued to slide. Chipmaker Nvidia slid 3.6% to $146.31. KLA-Tencor fell 3.5% to $92.39. Cisco Systems was down 1.6% to $31.56 after the seller of routers, switches, software and services lowered its earnings and revenue forecasts for the next few years.

PARED DEAL: Rite Aid dived 29.8% to $2.76 after Walgreens Boots Alliance abandoned a bid to buy the rival drugstore chain after resistance from U.S. regulators. Walgreens will instead buy more than 2,000 stores, three distribution centers and inventory in a new deal. Walgreens shares rose 43 cents to $77.52.

DONE DEAL: Staples rose 1.8% to $10.11 after private equity firm Sycamore Partners agreed to buy the office supplies chain for $6.9 billion.

ILLUMINATING RESULTS: Acuity Brands jumped 7.5% to $193.26 after the lighting company’s latest quarterly earnings and sales exceeded Wall Street’s expectations.

BANKS BOUNCE: Financial-sector stocks surged after the Federal Reserve said 34 of the biggest U.S. banks can buy back more stock and raise their dividends because their balance sheets are strong enough to bear a major downturn in the economy. The Fed’s announcement Wednesday afternoon marks the first time that all of the banks have passed their so-called stress tests, which were created after the global financial crisis of 2008.

Citigroup was up 2.1% to $66.55. JPMorgan Chase rose 0.8% to $90.53. Bank of America advanced 1.3% to $24.20.

CURRENCIES: The dollar fell to 112.10 yen from 112.28 yen. The euro strengthened to $1.1427 from $1.1382. The British pound rose to $1.2987 from $1.2929. European currency markets have been volatile in recent days after leading central bankers appeared to hint at an upcoming turn in monetary policy.

ENERGY: Oil prices were headed higher despite paring some early gains. Benchmark U.S. crude was up 14 cents at $44.88 a barrel in New York. Brent crude, the international standard, was up 11 cents at $47.65 in London.

BOND YIELDS: Bond prices fell. The 10-year Treasury yield rose to 2.26% from 2.23%.

MARKETS OVERSEAS: Major stock indexes in Europe veered lower. Germany’s DAX sank 1.8%, and the CAC 40 in France slid 1.9%. The FTSE 100 index of leading British shares was down 0.5%. In Asia, Japan’s benchmark Nikkei 225 index rose 0.5%, while South Korea’s Kospi gained 0.6%. Hong Kong’s Hang Seng climbed 1.1%. Australia’s S&P/ASX 200 also climbed 1.1%.