Stocks Skid as GE Tumbles 10/23 16:06
Industrial and technology companies and retailers all stumbled Monday as
U.S. stocks began the week with losses.
NEW YORK (AP) -- Industrial and technology companies and retailers all
stumbled Monday as U.S. stocks began the week with losses. General Electric
suffered its worst one-day loss in six years following downgrades from analysts.
After a mixed start, stocks turned lower in afternoon trading. GE's
struggles weighed on industrial companies, while big technology companies liked
Facebook and Alphabet sank. Toy companies Hasbro and Mattel tumbled after
Hasbro's sales forecast disappointed Wall Street and familiar consumer
companies like Amazon and McDonald's also slumped. Investors did far more
selling than buying as a seven-day winning streak ended. It was the worst day
for stocks in about seven weeks, but it was still a fairly small decline, as
almost nothing has seriously rattled investors this year.
"We have never seen the level of calm and the level of strength combined
that we've seen," said Mark Hackett, chief of investment research at Nationwide
Investment Management. "Investors are kind of willing to just trust it."
Hackett said it's very unusual that stocks have continued to rise without
any big sell-offs, but he doesn't see it as a problem. That's because major
economies like the U.S., Europe and China have all been growing for more than a
year, which isn't likely to end soon.
The Standard & Poor's 500 index lost 10.23 points, or 0.4 percent, to
2,564.98. The Dow Jones industrial average fell 54.67 points, or 0.2 percent,
to 23,273.96. The Nasdaq composite dropped 42.23 points, or 0.6 percent, to
6,586.83. The Russell 2000 index of smaller-company stocks sank 11.75 points,
or 0.8 percent, to 1,497.49.
General Electric took its biggest single-day loss since August 2011 after
analysts at UBS and Morgan Stanley lowered their ratings on its stock. GE stock
has been slumping all year, but it had edged higher Friday as investors reacted
positively to the conglomerate's third-quarter results. Analysts were less
optimistic Monday, as Christopher Belfiore of UBS cut his 2018 and 2019 profit
estimates for GE and said it's likely to reduce its dividend payments.
The stock fell $1.51, or 6.3 percent, to $22.32. It's down 29 percent this
Other industrial firms also took losses. Equipment rental company United
Rentals lost $2.92, or 2 percent, to $141.48. Arconic, which makes aluminum
parts for the aerospace and other industries, fell $2.52, or 9.2 percent, to
$24.65 after it disclosed a smaller-than-expected profit and named former GE
executive Charles Blankenship as its next CEO.
Hasbro tumbled after its sales forecast fell short of Wall Street estimates.
The company said the recent bankruptcy of Toys R Us hurt its business. Its
stock gave up $8.44, or 8.6 percent, to $89.75 and competitor Mattel fell 51
cents, or 3.2 percent, to $15.46.
Other consumer-focused companies also declined. Under Armour fell 63 cents,
or 3.6 percent, to $16.85 after the Wall Street Journal reported that
co-founder Kip Fulks' plans to take a sabbatical from the company, and that
Under Armour may exit its camping and hiking apparel business. Amazon slipped
$16.63, or 1.7 percent, to $966.30.
The S&P closed at an all-time high every day last week. According to S&P Dow
Jones indices, that hadn't happened since March 1998. Hackett, of Nationwide
Investments, said the steady rally over last year has been similar to the
market's rally in 1994-95, when the U.S. was recovering from the early '90s
recession and pro-business Republicans took control of Congress. He noted that
that calm stretch did not end in a market crash.
Several companies struck deals over the weekend. Communications software
maker BroadSoft agreed to be bought by Cisco Systems for $55 a share, or $1.9
billion. The stock added 90 cents, or 1.7 percent, to $54.80. It has climbed 27
percent since Aug. 29, when reports said BroadSoft was considering a sale.
Cisco rose 10 cents to $34.35.
Aetna will sell its U.S. group life and disability insurance businesses to
Hartford Financial Services for $1.45 billion. Hartford, which also reported
its third-quarter results on Monday, fell $2.43, or 4.3 percent, to $54.06.
Aetna gained 63 cents to $161.47.
Bond prices edged higher. The yield on the 10-year Treasury note slid to
2.37 percent from 2.38 percent.
Benchmark U.S. crude added 6 cents to $51.90 a barrel in New York. Brent
crude, used to price international oils, lost 38 cents to $57.37 a barrel in
Wholesale gasoline stayed at $1.68 a gallon. Heating oil lost 2 cents to
$1.79 a gallon. Natural gas jumped 8 cents, or 2.6 percent, to $2.99 per 1,000
Gold inched up 40 cents to $1,280.90 an ounce. Silver remained at $17.08 an
ounce. Copper rose 2 cents to $3.19 a pound.
The dollar rose to 113.73 yen from 113.50 yen. The euro fell to $1.173 from
The CAC 40 in France rose 0.3 percent and Germany's DAX rose 0.1 percent. In
Britain, the FTSE 100 was little changed.
Japan's benchmark Nikkei 225 jumped 1.1 percent after Prime Minister Shinzo
Abe's ruling Liberal Democratic Party scored a win in the nationwide
parliamentary election Sunday. The South Korean Kospi finished little changed
and Hong Kong's Hang Seng fell 0.6 percent.