Auto Sales Weigh on US Stocks

Auto Sales Weigh on US Stocks

NEW YORK (AP) -- U.S. stock indexes are little changed Tuesday morning as weak auto sales drag down car makers even as other companies report strong earnings. Industrial companies including engine maker Cummins and pump and valve maker Flowserve are rising after they posted their first-quarter results. Ford, General Motors and Fiat Chrysler are falling as it appears U.S. car sales are slowing down.

KEEPING SCORE: The Standard & Poor's 500 index remained at 2,387 as of 10:23 a.m. Eastern time. The Dow Jones industrial average added 14 points, or 0.1 percent, to 20,928. The Nasdaq composite lost 6 points, or 0.1 percent, to 6,086 after it set a record high Monday. The Russell 2000 index of small-company stocks sank 6 points, or 0.5 percent, to 1,400. That was a hint investors were concerned that weak auto sales are a warning sign about the U.S. economy. Those same worries hurt stocks a month ago.

STOP SIGNS: Big automakers said their U.S. sales fell last month, a strong signs that demand for cars, trucks and SUVs is starting to slow after seven straight years of growth. Ford's sales were down 7 percent in April as car sales plunged and GM's sales slid 6 percent as it sold fewer pickup trucks. Toyota posted a smaller decline. Vehicle sales have set records the last few years and experts expect that streak to end this year. While sales are still strong overall, analyst are worried car companies are relying too much on discounts and incentives to boost sales.

Ford lost 45 cents, or 3.9 percent, to $10.97 and GM gave up 94 cents, or 2.8 percent, to $33.26 while Fiat Chrysler skidded 60 cents, or 5.2 percent, to $10.82. Car suppliers and rental companies like AutoNation and BorgWarner slipped as well.

Some investors see car sales as an important indicator of how much consumers are willing to spend overall, and stocks struggled a month ago following a weak round of March auto sales reports.

EARNINGS POWER: Industrial companies made the biggest gains early on. Cummins reported a far bigger profit and better sales than analysts expected, and its stock climbed $8.65, or 5.7 percent, to $159.98. The company said demand from construction and mining sales grew compared to a year ago, but it said truck production in North America fell.

Flowserve, which makes pumps, valves, and other products for the oil and gas industries, beat expectation and said contract bookings improved. It added $2.09, or 4.2 percent, to $51.74. Meanwhile power management company Eaton said its sales grew for the first time in two years as hydraulics revenue jumped. The company raised its forecasts for the rest of the year and its stock gained 63 cents to $76.76.

GOOD GRADE: Consumer reviews website Angie's List soared after it agreed to be bought by media company IAC/InterActive for about $505 million in cash and stock. The deal values Angie's List at $8.50 a share, below the $8.75 IAC/InterActive offered when it tried to buy Angie's List in 2015. IAC/InterActive wants to combine Angie's List with its HomeAdvisor.com business, which offers resources for home repair and improvement projects. The company will be called ANGI Homeservices. Angie's List jumped $3.30, or 56 percent, to $9.19 and IAC/InterActive rose $12.18, or 14.5 percent, to $96.37.

BONDS: Bond prices headed higher. The yield on the 10-year Treasury note fell to 2.31 percent from 2.32 percent. Banks traded slightly lower. They made a big gain Monday as bond yields and interest rates increased. Higher bond yields allow banks to charge higher interest rates on loans.

ENERGY: Benchmark U.S. crude lost 24 cents to $48.60 a barrel in New York. Brent crude, used to price international oils, shed 11 cents to $51.41 a barrel in London.

CURRENCIES: The dollar rose to 112.15 yen from 111.83 yen. The euro fell to $1.0894 from $1.0906.

OVERSEAS: In Greece the Athex composite jumped 3 percent after the country and its creditors agreed Greece should make another round of pension cuts in 2019 and commit to a budget target when its current bailout program ends next year. That deal will restart bailout loan payments to Greece, meaning it won't face default. That could have touched off another eurozone crisis. Other European stocks also headed higher. Britain's FTSE 100 index gained 0.6 percent while the CAC 40 in France added 0.4 percent. In Germany, the DAX rose 0.3 percent.

The Japanese Nikkei 225 index advanced 0.7 percent and South Korea's Kospi gained 0.7 percent. The Hang Seng in Hong Kong added 0.3 percent.

(KA)