US stocks skid as banks, consumer products firms fall
New York – U.S. stocks are falling Thursday morning as weak results from banks and consumer products companies pull major indexes lower. Online retailer eBay plunged after its second-quarter sales fell short of Wall Street projections. Comcast rose after ending its bid to buy most of Twenty-First Century Fox.
Later, representatives of the auto industry will testify to Congress about tariffs on imported cars and car parts proposed by the Trump administration, something the auto industry opposes.
Keeping score: The S&P 500 index slid 12 points, or 0.5 percent, to 2,802 as of 10 a.m. Eastern time. The Dow Jones Industrial Average fell 121 points, or 0.5 percent, to 25,077. The Nasdaq composite gave up 35 points, or 0.5 percent, to 7,818. The Russell 2000 index of smaller-company stocks fell 5 points, or 0.3 percent, to 1,686.
Earnings: Second-quarter results and forecasts from U.S. companies continued to dominate trading. EBay slumped 9.2 percent to $34.44 after reporting revenue that missed forecasts.
American Express fell 3.4 percent to $99.50 after setting aside more money to cover potential bad loans. AmEx also saw its delinquency rate rise. That could mean that some of American Express’ customers, typically the most creditworthy, are struggling to pay their bills.
Philip Morris skidded 6.3 percent to $77.01 after cutting its annual profit forecast. IBM fared better. The stock rose 3.5 percent to $149.59 after the technology and consulting company reported results that surpassed analysts’ estimates.
Channel changer: Cable and internet provider Comcast said it won’t make another bid for Twenty-First Century Fox’s entertainment business and will instead focus on trying to buy European pay-TV operator Sky. Comcast had offered as much as $66 billion in cash for those businesses, but Disney topped it with a bid of $71 billion in cash and stock. Fox shareholders are scheduled to vote on Disney’s offer next week.
Comcast gained 3.3 percent to $35.15 while Fox fell 1.8 percent to $45.86. Disney gained 2.3 percent to $113.23, and in London, shares of Sky fell 1.9 percent.
Auto tariffs: The next big event on the global trade front may be the U.S. Commerce Department’s decision on possible taxes on imported vehicles and auto parts. It might recommend those tariffs if it determines the imports threaten America’s national security. Representatives of manufacturers, suppliers and car dealers are in Washington Thursday along with foreign diplomats to testify at a Congressional hearing, seeking to head off new auto tariffs. The European Union said it was already preparing measures to retaliate.
General Motors slid 1.2 percent to $39.39 and Tesla dipped 2.6 percent to $315.58. Auto parts retailer BorgWarner lost 1.3 percent to $45.40.
Early losers: Health care companies also struggled. Drugmaker AbbVie sank 5.2 percent to $89.47 and CVS Health shed 3.8 percent to $65.29. Industrial companies gave up some of Wednesday’s gains. 3M fell 1.2 percent to $199.79.
Commodities: Benchmark U.S. crude rose 1.1 percent to $69.51 per barrel in New York. Brent crude, used to price international oils, gained 0.6 percent to $73.33 per barrel in London.
Gold fell 1 percent to $1,216 an ounce and copper dropped 2.6 percent to $2.69 a pound. Mining companies and basic materials makers fell.
Bonds: Bond prices edged lower. The yield on the 10-year Treasury note fell to 2.86 percent from 2.87 percent.
Currencies: The dollar rose to 112.92 yen from 112.84 yen. The euro fell to $1.1600 from $1.1646. The ICE-US dollar index reached a 12-month high.
Overseas: Germany’s DAX fell 0.6 percent and France’s CAC 40 was down 0.4 percent. Britain’s FTSE 100 added 0.3 percent.
Asian markets finished mostly lower with Japan’s Nikkei 225 losing 0.1 percent and South Korea’s Kospi shed 0.3 percent. Hong Kong’s Hang Seng fell 0.4 percent.
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