US stocks skid as GE tumbles and technology companies fall
NEW YORK (AP) — General Electric is on track for its biggest loss in eight years Monday as industrial companies lead U.S. stocks lower. Technology companies and retailers are also weakening. Toy company Hasbro and competitor Mattel are tumbling after Hasbro’s sales forecast disappointed Wall Street. Stocks were at all-time highs after a six-week winning streak.
KEEPING SCORE: The Standard & Poor’s 500 index lost 7 points, or 0.3 percent, to 2,567 as of 3:25 p.m. Eastern time. The Dow Jones industrial average fell to 22 points, or 0.1 percent, to 23,306. The Nasdaq composite fell 32 points, or 0.5 percent, to 6,596. The Russell 2000 index of smaller-company stocks sank 10 points, or 0.7 percent, to 1,499.
The S&P closed at an all-time high every day last week. According to S&P Dow Jones indices, that hadn’t happened since March 1998, according to S&P Dow Jones indices.
POWER DOWN: General Electric headed for its biggest single-day loss since early 2009 after analysts at UBS and Morgan Stanley lowered their estimates on the company. GE stock has been slumping all year, but it had edged higher Friday as investors reacted positively to the conglomerate’s third-quarter results. Analysts were less optimistic Monday, as Christopher Belfiore of UBS cut his 2018 and 2019 profit estimates for GE and said it’s likely to reduce its dividend payments.
The stock fell $1.63, or 6.8 percent, to $22.20. It’s down 30 percent this year.
Other industrial firms also took losses. Equipment rental company United Rentals lost $2.85, or 2 percent, to $141.55. Arconic, which makes aluminum parts for the aerospace and other industries, fell $2.52, or 9.2 percent, to $24.65 after it disclosed a smaller-than-expected profit. Boeing sank $2.25 to $262.50.
THE QUOTE: Mark Hackett, chief of investment research at Nationwide Investment Management, said it’s very unusual that stocks have continued to rise without any big sell-offs. But he said the calm that’s descended on Wall Street makes sense because major economies like the U.S., Europe and China have all been growing for more than a year, and that’s not likely to end right now.
“We have never seen the level of calm and the level of strength combined that we’ve seen,” he said. “Investors are kind of willing to just trust it.”
Hackett said the steady rally over last year has been similar to the market’s rally in 1994-95, when the U.S. was recovering from the early ’90s recession and pro-business Republicans took control of Congress. He noted that that calm period did not end in a market crash.
NO JOY FOR TOYS: Hasbro tumbled after its sales forecast fell short of Wall Street estimates. The company said the recent bankruptcy of Toys R Us affected its business. Its stock gave up $8.40, or 8.6 percent, to $89.79 and competitor Mattel fell 55 cents, or 3.4 percent, to $15.42.
EARNINGS: Investors were also occupied with companies’ quarterly results. Electronic storage company Seagate Technology surged after its first-quarter report surpassed analysts’ expectations. The stock gained $4.42, or 12.7 percent, to $39.36. VF Corp., which owns brands including Vans, Timberland and Wrangler, raised its estimates for the year after a strong third quarter report. Its shares advanced $3.40, or 5.1 percent, to $69.78.
DEALS: Communications software maker BroadSoft added 95 cents, or 1.8 percent, to $54.85 after Cisco Systems agreed to buy it for $55 a share, or $1.9 billion. The stock has climbed 27 percent since Aug. 29 on reports BroadSoft planned to consider a sale. Cisco rose 16 cents to $34.42.
Timber and wood products companies Potlach and Deltic Timber also said they will combine. Potlach said it will buy Deltic in an all-stock deal that will create a company that owns about 2 million acres of timber. Deltic added $3.93, or 4.4 percent, to $93.05 and Potlach dropped 25 cents to $52.75.
Aetna is selling its U.S. group life and disability insurance businesses to Hartford Financial Services for $1.45 billion. Hartford, which also reported its third-quarter results on Monday, fell $2.48, or 4.4 percent, to $54.02. Aetna gained $1.29 to $162.13.
BONDS: Bond prices held steady. The yield on the 10-year Treasury note remained at 2.38 percent.
ENERGY: Benchmark U.S. crude added 6 cents to $51.90 a barrel in New York. Brent crude, used to price international oils, lost 38 cents to $57.37 a barrel in London.
Wholesale gasoline stayed at $1.68 a gallon. Heating oil lost 2 cents to $1.79 a gallon. Natural gas jumped 8 cents, or 2.6 percent, to $2.99 per 1,000 cubic feet.
METALS: Gold inched up 40 cents to $1,280.90 an ounce. Silver remained at $17.08 an ounce. Copper rose 2 cents to $3.19 a pound.
CURRENCIES: The dollar rose to 113.73 yen from 113.50 yen. The euro fell to $1.173 from $1.1780.
OVERSEAS: The CAC 40 in France rose 0.3 percent and Germany’s DAX rose 0.1 percent. In Britain, the FTSE 100 was little changed.
Japan’s benchmark Nikkei 225 jumped 1.1 percent after Prime Minister Shinzo Abe’s ruling Liberal Democratic Party scored a win in the nationwide parliamentary election Sunday, partly because of a splintered opposition. However a new pacifist opposition party made dramatic gains. That underscored voters’ doubts about Abe’s agenda for revising Japan’s war-renouncing constitution and strengthening the military.
The South Korean Kospi finished little changed and Hong Kong’s Hang Seng fell 0.6 percent.