'Sell' market dings stocks
NEW YORK — The stock market finished mostly lower on Thursday as investors assessed the latest batch of company earnings and sold utility and energy stocks.
Tesla, a maker of electric cars, fell after reporting a first-quarter loss and saying it would need to invest more in its business.
Companies that pay steady dividends and have a long record of profitability, such as utilities, have surged this year, benefiting from a shift in sentiment as investors sold previously high-flying Internet and small-company stocks. A sell-off in these stocks could be a troubling sign for the overall market.
“The market's still pretty sloppy,” said Quincy Krosby, a market strategist at Prudential Financial. “The fear in the market is that the selling spreads to the defensive stocks, the safe havens, and that could bring down the whole market.”
The Standard & Poor's 500 index fell 2.58 points, or 0.1 percent, to 1,875.63. The Dow Jones industrial average edged up 32.43 points, or 0.2 percent, to 16,550.97. The Nasdaq composite lost 16.18 points, or 0.4 percent, to 4,051.50.
Utility companies in the S&P 500 fell 1.2 percent, paring their gains this year to 12.5 percent. Energy stocks dropped 1.3 percent.
Stocks had started the day higher as investors looked over earnings reports and after some encouraging news on hiring.
The government reported that the number of Americans seeking unemployment benefits fell 26,000 last week to 319,000, the latest sign that the job market is slowly improving. The drop follows two weeks of increases that reflected mostly temporary layoffs around the Easter holiday.
Keurig Green Mountain was among the big gainers. The maker of specialist coffees climbed $11.98, or 13 percent, to $104.19 after its earnings exceeded analysts' estimates. Keurig, known for its single-serve coffee brewing system, said late Wednesday that its net income climbed 22 percent in its fiscal second quarter.
Twenty-First Century Fox was another winner. The company's stock rose $2.10, or 6.5 percent, to $34.22 after it also reported earnings that surpassed analysts' expectations.
Fox's television unit got a boost from higher advertising revenue during the National Football League playoffs and the Super Bowl.
Tesla was among the day's losers.
The company, which makes electric cars, reported a $49.8 million first-quarter loss late Wednesday and said that spending on investments would weigh on earnings later this year.
Tesla now sells only one car, the Model S, which starts at $70,000, but it's working on two other vehicles, an electric crossover SUV called the Model X and a lower-cost model.
The company's stock fell $22.76, or 11.3 percent, to $178.59.
Almost 90 percent of companies in the S&P 500 have now reported first-quarter earnings.
Overall earnings are expected to grow by 3.3 percent in the quarter, according to data from S&P Capital IQ. That compares with growth of almost 8 percent in the fourth quarter of 2013 and 5.2 percent in the same period a year ago.
Revenue also grew in the first quarter, rising 3.3 percent versus 1.6 percent growth in the fourth quarter, a positive sign that companies are experiencing stronger demand. Some investors believe that companies are still relying too much on cost-cutting to generate earnings growth.
“Those kind of cost-reduction strategies only go so far before you do need to have more top-line growth, and it remains to be seen whether companies can continue to grow in what remains, by many measure, a slow-growing economy,” said Tom Karsten, chief investment officer at Karsten Advisors.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Chevron settles fatal well fire lawsuit for $5 million
- Pitt study suggests health law attracting young to balance insurers’ risks
- Task force to plot ways of easing gas glut in Pennsylvania via pipelines
- IRS cybersecurity breach touches lives of homebuyers, others
- UPMC offering buyouts to 3,500 employees in cost-cutting move
- Shoppers pay premium for organic chicken
- Tight supply pushes home prices higher
- EDMC to close quarter of its Art Institute campuses, but Pittsburgh’s spared
- Financial planning for disabled people a little-tapped field
- Market inches further into record territory as oil price jump boosts energy sector
- Exxon, Chevron shareholders reject big oil restrictions