U.S. stocks drifted lower Friday afternoon, a day after the Standard & Poor’s 500 index hit its latest record high. Investors had their eye on new data on the U.S. manufacturing sector and the latest corporate earnings news. Financial stocks were among the biggest decliners.
KEEPING SCORE: The Dow Jones industrial average fell 21 points, or 0.1 per cent, to 18,230 as of 2:07 p.m. Eastern time. The Standard & Poor’s 500 index fell two points, or 0.1 per cent, to 2,118. The Nasdaq composite declined 13 points, or 0.3 per cent, to 5,036.
THE QUOTE: The S&P 500 closed at an all-time high on Thursday, while the Dow came within 36 points of its own record. When the market hits new milestones it tends to make investors reluctant to bid up stocks further, especially before the weekend, said JJ Kinahan, TD Ameritrade’s chief strategist.
“Often, in fact, there’s a bit of selling pressure in these situations as many people want to book some profits after these days,” he said.
SECTOR VIEW: Six of the 10 sectors in the S&P 500 index rose, led by utilities stocks. The sector remains down 6.5 per cent this year. Financials fared the worst. The sector is down 0.6 per cent this year.
UNAPPETIZING OUTLOOK: El Pollo Loco Holdings tumbled 14.7 per cent after the restaurant operator reported better-than-expected financial results, but disappointed Wall street with a cautious outlook. The stock lost $4.27 to $24.79.
PRICEY JAVA: Keurig Green Mountain sank 7.5 per cent as investors worried that the company’s new cold-drink machine is priced too high. The stock lost $7.75 to $95.32.
DISAPPOINTING RESULTS: Dillard’s reported weak first-quarter financial results, which pulled the department store chain’s shares down 8.4 per cent. The stock lost $10.49 to $113.71.
NETFLIX BUZZ: Shares in Netflix surged following a published report saying that the video streaming service is in talks to do business in China. The stock climbed 4.8 per cent, notching the biggest gain among stocks in the S&P 500. Netflix rose $28.31 to $615.16.
STRONG QUARTERS: Applied Materials gained 2 per cent after the semiconductor maker reported quarterly results that came in ahead of analysts’ forecasts. The stock added 40 cents to $20.26. Investors also applauded the latest earnings from Darling Ingredients. The producer of natural ingredients reported a first-quarter profit on lower expenses, beating Wall Street expectations. Darling’s shares rose $1.60, or 11.4 per cent, to $15.69.
MANUFACTURING UPDATE: Separate reports offered a mixed assessment of U.S. manufacturing. The Federal Reserve said factory activity in New York increased slightly in May, suggesting that manufacturers are beginning to adapt to the challenges caused by a stronger dollar, lower oil prices and restrained consumer spending. Meanwhile, U.S. industrial output fell for the fifth straight month in April. The trend suggests that weakness in manufacturing and mining are weighing heavily on the economy.
“This week, on balance, the economic reports have been a little soggy,” said Bob Doll, chief equity strategist at Nuveen Asset Management. “We’re muddling through and the market is just fine with that.”
EUROPEAN ACTION: European Central Bank President Mario Draghi said that the bank will fully implement its $1.2 trillion bond-buying program. There had been some speculation that the ECB might end the program earlier than anticipated in the wake of solid economic growth figures. Germany’s DAX fell 0.2 per cent while the CAC-40 in France rose 0.1 per cent. The FTSE 100 index of leading British shares was up 0.2 per cent.
ASIA SCORECARD: Japan’s Nikkei 225 gained 0.8 per cent while Hong Kong’s Hang Seng gained 2 per cent. Australia’s S&P/ASX 200 rose 0.7 per cent. South Korea’s Kospi fell 0.7 per cent after the Bank of Korea kept its benchmark interest rate unchanged. The Shanghai Composite index dropped 1.6 per cent. Markets in Southeast Asia mostly rose.
ENERGY: Benchmark U.S. crude oil fell 29 cents to $59.60 a barrel on the New York Mercantile Exchange.
BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.14 per cent from 2.23 per cent late Thursday.
METALS: Precious and industrial metals futures edged mostly higher. Gold increased 10 cents to $1,225.30 an ounce, silver also rose 10 cents to $17.56 an ounce and copper was unchanged at $2.92 a pound.