Stocks Slip After Weak Economic Data 05/23 12:56
U.S. stocks are lower in wobbly trading Wednesday as banks drop along with
NEW YORK (AP) -- U.S. stocks are lower in wobbly trading Wednesday as banks
drop along with bond yields. Energy and industrial companies are also down.
Investors are concerned about the European economy after a measure of business
activity in the region fell to an 18-month low in May. Target is sliding after
big investments in its operations cut into its first-quarter profit while
Tiffany is soaring after issuing a strong report.
KEEPING SCORE: The S&P 500 index shed 8 points, or 0.3 percent, to 2,716 as
of 1:30 p.m. Eastern time. The Dow Jones industrial average slid 115 points, or
0.5 percent, to 24,719 as Goldman Sachs and American Express both took losses.
The Nasdaq composite gave up 8 points, or 0.1 percent, to 7,369. The Russell
2000 index of smaller-company stocks dipped 3 points, or 0.2 percent, to 1,622.
Stocks were higher for most of the Tuesday but slipped late in the day.
EUROPE'S ECONOMY: A survey suggested that the eurozone's economy might
remain weak for longer than experts had expected. IHS Markit's purchasing
managers' index, a broad gauge of business activity, fell to an 18-month low in
May. The regional economy is still growing, but investors hoped to see a
rebound after the first quarter of the year.
Germany's DAX gave up 1.5 percent and France's CAC 40 fell 1.3 percent while
the British FTSE 100 lost 1.1 percent. Investors bought European government
bonds, pushing prices higher and yields lower in Germany, Spain, France and the
BONDS: Bond prices climbed. The yield on the 10-year Treasury note fell to
3.03 percent from 3.06 percent. With interest rates in decline, banks lost
ground. Citigroup fell 1.8 percent to $69.83 and Bank of American lost 1.7
percent to $30.36.
Banks climbed Tuesday as Congress prepared to vote on a bill that eased some
of the regulations passed after the 2008 financial crisis. The legislation
passed the House Tuesday evening and President Donald Trump is expected to sign
it into law. Real estate investment trusts, utilities, and other stocks that
pay large dividends rose. Those stocks are often considered alternatives to
bonds, and investors who want income often buy them when bond yields decrease.
RETAIL DETAILS: Target slumped after its first-quarter profit fell short of
expectations. The big box retailer said more customers came to its stores and
sales improved, but it's spending a lot of money to try to reinvent itself to
better compete with Amazon. Target plans to spend $7 billion through 2020 to
update stores and open smaller locations in urban markets. The stock sank 5.5
percent to $71.35.
Tiffany sparkled in the first quarter as the jewelry company's earnings and
sales blew past Wall Street projections. The company also said it's planning to
buy back $1 billion in its own stock. The stock jumped 20.1 percent to $122.83.
Home improvement retailer Lowe's had a mostly disappointing first quarter as
harsh winter weather cut into the traditional spring sales season, but the
company forecast stronger sales growth for the rest of the year. The stock
surged 10 percent to $94.35. Lowe's stock and its sales have lagged behind Home
Depot, but it made up ground on Wednesday.
Also rising after its quarterly report was Ralph Lauren, which jumped 15.6
percent to $134.79.
CABLE HOOKUP: Comcast said it is preparing an all-cash offer for
Twenty-First Century Fox's entertainment and international divisions, and said
it plans to bid more than the $52.4 billion Disney offered. Comcast didn't
disclose other details about its plans. Fox rose 2.3 percent to $39.02 while
Comcast fell 2.1 percent to $31.83, and Disney slid 1.1 percent to $102.94.
Buying those Fox businesses would help Disney compete with technology
companies in the entertainment business. Any tie-up would put in its stable
more Marvel superheros, as well as the studios that produced the Avatar movies,
"The Simpsons" and "Modern Family."
NOT WELL DONE: Red Robin Gourmet Burgers tumbled after the company's
quarterly profit was much smaller than analysts anticipated. Its sales also
fell short of estimates and the stock tumbled 19.5 percent to $46.63.
UN-PACKED: While Hewlett Packard Enterprise reported a larger profit and
more revenue than expected, analysts said much of the company's strength came
from a lower tax rate, and they weren't impressed by results from some of its
businesses. Mehdi Hosseini of Susquehanna Financial Group said the company's
less profitable products are doing better than higher margin items like high
performance computing devices. The stock lost 11.2 percent to $15.47.
ENERGY: Benchmark U.S. crude lost 0.7 percent to $71.67 per barrel in New
York. Brent crude, used to price international oils, dropped 0.4 percent to
$79.26 a barrel in London.
CURRENCIES: The dollar dropped to 110.27 yen from 111.02 yen. The euro fell
to $1.1682 from $1.1779.
METALS: Gold lost 0.2 percent to $1,289.60 an ounce. Silver fell 1 percent
to $16.41 an ounce. Copper plunged 2 percent to $3.07 a pound.
ASIA: Japan's benchmark Nikkei 225 fell 1.2 percent and South Korea's Kospi
gained 0.3 percent. Hong Kong's Hang Seng lost 1.8 percent.