Tech Companies Pull Stocks Lower
Tech Companies Pull Stocks Lower
NEW YORK (AP) -- U.S. stocks are falling Thursday morning and following international markets lower. Technology companies and retailers are taking some of the largest losses. Investors appeared rattled that the Bank of England came close to raising interest rates sooner than many had expected, and by reports the special counsel appointed to investigate Russian influence in the 2016 presidential campaign is now examining whether President Donald Trump tried to obstruct justice.
KEEPING SCORE: The Standard & Poor's 500 index fell 12 points, or 0.5 percent, to 2,425 as of 10:03 a.m. Eastern time. The Dow Jones industrial average fell 54 points, or 0.3 percent, to 21,320 after it closed at a record high Wednesday. The Nasdaq composite dropped 59 points, or 1 percent, to 6,135. The Russell 2000 index of small-company stocks lost 4 points, or 0.3 percent, to 1,413.
TECH TURMOIL: The recent slump for technology companies continued. The stocks have done far better than the market this year but have stumbled since Friday. Facebook shed $2.74, or 1.8 percent, to $147.51 and Apple gave up $1.27 to $143.89. Alphabet, Google's parent company, sank $21.15, or 2.2 percent, to $946.78 and Microsoft lost 97 cents, or 1.4 percent, to $69.30.
RETAIL REVERSAL: Consumer-focused companies like retailers also struggled. Nike declined $1.21, or 2.2 percent, to $53.45 after the company said it will eliminate 1,400 jobs, or about 2 percent of its staff positions, and reduce the number of sneaker styles it sells by about a quarter. Amazon dipped $16.96, or 1.7 percent, to $959.51.
Grocery chain Kroger fell sharply after it cut its annual profit outlook. The company faces growing competition from discount chain Aldi and from Lidl, a German chain that is opening its first locations in the U.S. Kroger said sales at supermarkets open at least a year decreased for the second quarter in a row, a slump that broke a chain of seven straight years of growth.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
The stock plunged $4.12, or 13.6 percent, to $26.16. Competitor Supervalu fell 16 cents, or 3.9 percent, to $3.90.
ECONOMY: The Federal Reserve said overall production by U.S. factories, mining and utility companies was unchanged in May. But factory output fell after a large gain the month before. Mining activity climbed. The price of gold sank $19.40, or 1.5 percent, to $1,256.40 an ounce and silver lost 38 cents, or 2.2 percent, to $16.76 an ounce.
U.S. manufacturing has shown some signs of life this year after almost no growth in 2015 and 2016. Overseas economies have picked up, lifting exports, and businesses are investing in more equipment.
ENGLAND: The Bank of England left interest rates alone, but came closer to raising interest rates for the first time in 10 years than many expected. Three of the eight members of its Monetary Policy Members wanted to raise rates by a quarter-point. A growing number of its policy makers seem to be worried about a spike in inflation that is eating into the living standards of the British.
On Wednesday the Federal Reserve raised U.S. interest rates for the third time in about six months, and suggested it will raise rates again later this year.
RUSSIA PROBE: The Washington Post reported late Wednesday that special counsel Robert Mueller is examining whether President Donald Trump tried to obstruct justice. Allegations of obstruction arose last month when Trump fired FBI Director James Comey. The paper said Muller, who was appointed to investigate Russian influence in the presidential election, wants to interview three Trump administration national security officials who weren't involved in Trump's campaign.
BONDS: Bond prices fell. The yield on the 10-year Treasury note rose to 2.17 percent from 2.13 percent. That helped bank stocks do better than most other industries.
ENERGY: Benchmark U.S. crude fell another 10 cents to $44.63 a barrel in New York. Brent crude, used to price international oils, added 1 cent to $47.01 a barrel in London.
CURRENCIES: The dollar rose to 110.36 yen from 109.53 yen. The euro dropped to $1.1150 from $1.1220.
OVERSEAS: Germany's DAX fell 1.3 percent while the CAC40 of France sank 1.1 percent. The FTSE 100 of Britain dropped 1.1 percent as well. Japan's Nikkei 225 stock index fell 0.3 percent and South Korea's Kospi sank 0.5 percent. The Hang Seng in Hong Kong dropped 1.2 percent.
(KA)