Major US Stock Indexes Close Lower 08/20 16:08
Stocks fell broadly on Wall Street Tuesday after another slide in bond
yields and a mixed batch of corporate earnings weighed on the market.
(AP) -- Stocks fell broadly on Wall Street Tuesday after another slide in
bond yields and a mixed batch of corporate earnings weighed on the market.
The selling pulled every major sector lower, snapping a three-day winning
streak for the S&P 500.
Financial sector stocks bore the brunt of the decline as investors reacted
to lower yields. Technology stocks, which like banks have tended to lead the
market's gains recently, gave up an early gain.
Home Depot climbed after the home improvement retailer reported earnings
that topped Wall Street's forecasts. But two other big retailers didn't fare as
well. Investors sent Kohl's and TJX lower after their latest quarterly report
cards fell short of analysts' expectations.
Tuesday's market slide is the latest twist for stocks, which have been
caught in the grips of volatile trading all month as anxious investors
alternate between seeking shelter in bonds and pouncing on stocks when prices
"The market is taking a little bit of a breather here," said Tony Roth,
chief investment officer at Wilmington Trust. "You're getting just a little bit
of consolidation after the rally we've had over the last three or four days."
The S&P 500 fell 23.14 points, or 0.8%, to 2,900.51. The Dow Jones
Industrial Average slid 173.35, or 0.7%, to 25,962.44. The Nasdaq, which is
heavily weighted with technology stocks, dropped 54.25, or 0.7%, to 7,948.56.
The Russell 2000 index of smaller company stocks gave up 10.84 points, or 0.7%,
All four indexes are on track to finish the month with losses.
The market has been highly volatile all month as investors try to parse
conflicting signals on the U.S. economy and determine whether a recession is on
the horizon. A key concern is that the escalating and costly trade conflict
between the world's two biggest economies will hamper growth around the globe.
Earlier this month, President Donald Trump announced plans to extend tariffs
across virtually all Chinese imports, many of them consumer products that were
exempt from earlier rounds of tariffs.
Uncertainty over trade clouded an otherwise strong quarterly report card
from Home Depot.
The home improvement retailer cut its sales expectations for the year
Tuesday, citing declining lumber prices and the potential impacts to the U.S.
consumer arising from recently announced tariffs.
That didn't scare off investors. Home Depot shares jumped 4.4%, the biggest
gain in the S&P 500, as investors focused on the company's solid quarterly
results. Lowe's rode its rival's surge, finishing with a 3% gain.
Kohl's, meanwhile, was the biggest decliner in the S&P 500. The department
store operator reported a sharper than expected decline in sales at established
locations during the second quarter. The stock lost 6.9%.
Another decline in bond yields also weighed on the market Tuesday. The yield
on the 10-year Treasury slipped to 1.55% from 1.59% late Monday.
When bond yields fall, it pulls down the interest rates that banks pocket on
mortgages and other consumer loans. That helped pull financial stocks lower.
Bank of America dropped 2%.
Technology stocks, which like banks have tended to lead the market's gains
recently, also fell after briefly turning higher in the middle of the day.
Western Digital dropped 1.9%.
Some chipmakers continued to rise on news Monday that the U.S. gave Chinese
telecom giant an extension to buy more supplies from U.S. companies. Qualcomm
Household goods makers and communication services stocks were among the
decliners. Energy stocks also fell.
Last week, many stock indexes around the world struck their lowest levels
this year, before a late rally suggested some calm was returning to the markets
in what is a traditionally low-volume time of the year. Analysts say the
concerns that drove last week's sell-off could resurface at any time.
Investors will be seeking new insight this week into the Federal Reserve's
willingness to make further interest rate cuts.
The central bank is releasing the minutes from last month's meeting of
policymakers Wednesday. Two days later, Fed Chairman Jerome Powell is scheduled
to deliver a speech at the central bank's annual conference in Jackson Hole,
Investors are hoping the Fed will continue to cut interest rates to shore up
economic growth. The Fed lowered interest rates by a quarter-point at its last
meeting, the first cut in a decade.
"Coming into this meeting Friday for the speech, the market is really going
to be looking for something that suggests that (Powell) has changed his
approach and that this is going to be more of a systematic lowering of interest
rates," Roth said. "He may not provide what the market wants."
Benchmark crude oil fell 3 cents to settle at $56.18 a barrel. Brent crude
oil, the international standard, rose 29 cents to close at $60.03 a barrel.
Wholesale gasoline rose 2 cents to $1.68 per gallon. Heating oil climbed 2
cents to $1.85 per gallon. Natural gas rose 1 cent to $2.22 per 1,000 cubic
Gold rose $4.20 to $1,504.60 per ounce, silver rose 21 cents to $17.12 per
ounce and copper fell 3 cents to $2.57 per pound.
The dollar fell to 106.32 Japanese yen from 106.62 yen on Monday. The euro
strengthened to $1.1097 from $1.1082.