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Falling oil prices, weak earnings push stocks down
NEW YORK (AP) — Falling energy prices and disappointing earnings reports pushed stock prices sharply lower Wednesday on Wall Street.
The Dow Jones industrial average was down almost 150 points in late-morning trading, giving back most of the gain it made the day before.
Energy stocks led the market lower with a decline of 2.2 percent as the price of crude oil fell for the fourth day in five. Crude has fallen $7 a barrel during the past week to $87 a barrel, its lowest level since December, as the outlook for the global economy weakens while oil supplies remain high. Chevron fell 2 percent to $114.30 and Exxon Mobil dropped 1.2 percent to $85.53.
Bank of America fell 5.3 percent to $11.63 after reporting earnings that fell short of analysts’ expectations. The lender also agreed to pay $500 million to settle a class-action lawsuit brought by investors who bought mortgage investments from Countrywide Financial, a lender it acquired in 2008. Other bank stocks were also lower.
Technology stocks fell sharply, led by Apple. The Nasdaq composite index fell 67 points, or 2 percent, to 3,198. Apple, which makes up 8 percent of the index, slumped 4.6 percent to $403, its lowest stock price in a year.
A key supplier of iPhone parts reported that inventories were moving slowly, a warning sign that sales of the hit smartphone may be weakening. Google fell 1.2 percent to $783 following disruptions in some of its popular services such as Gmail and Google Drive.
The stock market has had a roller-coaster ride this week. The Dow logged its biggest drop in five months Monday, 265 points, as concern rose about a slowdown in economic growth in China and as the price of gold had its biggest plunge in 30 years. The index won back more than half of that loss Tuesday following strong housing and earnings reports.
The Dow Jones Industrial average was down 149 points, or 1 percent, to 14,606 as of noon EDT Wednesday. The index is down 1.7 percent this week.
The Standard & Poor’s 500 index dropped 22 points, or 1.4 percent, to 1,551 and is 2.3 percent lower since the opening bell on Monday. Small-company stocks fell even more than the broader market, a signal that investors are moving money out of higher-risk investments. The Russell 2000 dropped 2 percent to 904.
Company earnings for the first three months of the year are reflecting that economic growth has been slow and steady, rather than robust as investors had hoped, said Kevin Mahn, president of Hennion and Walsh Asset Management. Consumers and businesses are still reluctant to ratchet up spending.
“We’re moving ahead, but begrudgingly and very slowly,” said Mr. Mahn, “I don’t think that the plough horse is going to start stepping backwards, but it certainly doesn’t have the capacity to start speeding up, at least right now.”
Among other stocks making big moves, Textron, a maker of small aircraft, plunged 13 percent to $25.61 after the company cut its outlook for business jet deliveries. The Bank of New York Mellon fell 3 percent to $25.76 after it reported a first-quarter loss following a hefty $266 million tax-related charge.
Fairway climbed 31 percent to $16.98 on its stock market debut, even after the grocery store chain priced its initial public offering above expectations.
The yield on the 10-year Treasury note, which moves inversely to its price, fell to 1.70 percent from 1.73 percent.
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