Consumer and Energy Stocks Drop -- WSJ
October 18 2016 - 2:02AM
Dow Jones News
Several companies' better-than-expected earnings help to limit
U.S. market's decline
By Riva Gold and Aaron Kuriloff
Consumer-discretionary stocks slipped and falling oil prices
weighed on energy shares as U.S. stocks started the week lower.
Upbeat earnings reports helped cushion the U.S. market from
broader global declines. Shares of Hasbro gained $5.66, or 7.4%, to
$81.82 after the company posted stronger-than-expected earnings.
Bank of America rose five cents, or 0.3%, to 16.05 after the lender
became the latest U.S. bank to beat analysts' expectations.
The Dow Jones Industrial Average fell 51.98 points, or 0.3%, to
18086.40. The S&P 500 slipped 6.48 points, or 0.3%, to 2126.50,
and the Nasdaq Composite declined 14.34 points, or 0.3%, to
5199.82.
Consumer-discretionary stocks were the worst-performing sector
in the S&P 500, declining 0.8%. McDonald's fell the most in the
Dow industrials, losing 1.68, or 1.5%, to 112.41 as more senior
executives are set to announce their departures from the burger
chain.
Energy shares in the S&P 500 declined 0.4% as U.S. crude
fell 0.8% to $49.94 a barrel. Southwestern Energy lost 43 cents, or
3.3%, to 12.47.
The Stoxx Europe 600 shed 0.7% as long-dated government bonds
plumbed their lowest levels since the U.K. vote to leave the
European Union.
The yield on the 10-year U.S. Treasury note rose as high as
1.814%, its highest since early June, before retreating to 1.766%.
Yields move inversely to prices.
While the recent rise in long-dated bond yields "feels like it's
U.K.-led," this looks like a much more widespread reassessment of
monetary and fiscal policy around the world, said James Athey,
investment manager at Aberdeen Asset Management.
"Officials continue to signal a shift from monetary to fiscal
stimulus," he said, which should suggest an environment where
yields are higher and the yield curve is steeper.
Outside the U.K., investors also had grown concerned in recent
weeks about the European Central Bank's plans for its bond-buying
program. The bank holds a meeting Thursday, with many investors
expecting confirmation that it doesn't plan to swiftly end its
asset-purchase program. "We believe the ECB is still committed to
its ultraloose monetary policy and that its main target is to fight
off deflation," said Jean-François Clément, investment director at
Unigestion.
On Monday, Eurostat left its estimate of the eurozone's annual
rate of inflation for September unchanged at 0.4%. Rising inflation
expectations had chipped away at the value of bonds in recent
sessions.
Investors also focused on comments Friday from Federal Reserve
Chairwoman Janet Yellen, who offered an argument for running the
U.S. economy hot for a period to boost consumer spending and
business investment.
The U.S. central bank meets Nov. 1-2, a week before the
presidential election. In an interview with The Wall Street
Journal, Boston Fed President Eric Rosengren signaled a willingness
to keep interest rates steady in November and wait until
mid-December before moving them higher.
Expectations have risen recently for the Fed to raise interest
rates later this year, helping send the WSJ Dollar Index on Friday
to its highest level since March.
The index, which measures the U.S. currency against 16 others,
fell 0.2% Monday. The euro rose 0.3% against the dollar to $1.1002.
The dollar was down 0.3% against the yen at Yen103.89 after rising
against the Japanese currency for three consecutive weeks.
Shares in Asia mostly trended lower, with Hong Kong stocks among
the biggest decliners on news that Chinese authorities detained
employees at casino operator Crown Resorts for suspected gambling
crimes.
The Hang Seng Index fell 0.8%, while the Shanghai Composite
Index declined 0.7% and shares in Australia fell 0.8%.
Japan's Nikkei Stock Average gained 0.3%, as financial stocks
caught up with Friday's gains in global lenders.
--Ese Erheriene contributed to this article.
Write to Riva Gold at riva.gold@wsj.com and Aaron Kuriloff at
aaron.kuriloff@wsj.com
(END) Dow Jones Newswires
October 18, 2016 02:47 ET (06:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Bank of America (NYSE:BAC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Bank of America (NYSE:BAC)
Historical Stock Chart
From Apr 2023 to Apr 2024