Stocks close slightly lower, trimming earlier losses
Stocks closed slightly lower Wednesday, making up much of the ground they lost earlier following a rare batch of earnings disappointments by Walt Disney and other big companies.
Consumer-focused stocks, media companies and banks accounted for much of the market decline. They outweighed gains in health care stocks and elsewhere. Small-company stocks fell more than the rest of the market.
Investors' unease over escalating tensions between the United States and North Korea had weighed on stocks earlier in the day, pushing gold and bond prices slightly higher. But by the end of the day, traders appeared to take the geopolitical drama in stride.
“Right now, the market is viewing it as a lot of saber-rattling and a lot of smoke, but not much fire,” said Darrell Cronk, president of Wells Fargo Investment Institute.
The Standard & Poor's 500 index slipped 0.90 points, or 0.04 percent, to 2,474.02. The Dow Jones industrial average slid 36.64 points, or 0.2 percent, to 22,048.70. Earlier, the average had been down more than 88 points.
The Nasdaq composite lost 18.13 points, or 0.3 percent, to 6,352.33. The Russell 2000 index of smaller-company stocks gave up 13.20 points, or 0.9 percent, to 1,396.95. That's the index's lowest level in two months.
The stage was set for the U.S. indexes to go lower early Wednesday as investors around the world reacted to the rising war of words between the United States and North Korea, pushing global market indexes lower.
On Tuesday, President Trump warned North Korea of “fire and fury” in response to recent threats from Pyongyang, which said it was examining plans for attacking Guam, a U.S. territory in the Pacific with a military base. Trump's comments followed reports that the North has mastered a technology needed to strike the United States with a nuclear missile.
Investors reacted by driving up the price of gold and bonds, traditional safe-haven plays. But the moves were modest.
“It's amazing when you consider the headlines just how calm the equity markets are, how they've taken things in their stride,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte. “There was some skittishness earlier, but then some buyers stepped in.”
Gold added $16.70, or 1.3 percent, to settle at $1,279.30 an ounce.
Bond prices rose. The yield on the 10-year Treasury note slipped to 2.25 percent from 2.26 percent late Tuesday.
While the tough talk about the potential for war is scary, investors have heard it many times before.
“North Korea was fodder for the overnight trade, and as we headed into today we haven't seen any more saber-rattling,” said JJ Kinahan, chief market strategist at TD Ameritrade. “I would expect the markets to react again pretty negatively to any more tough talk from either side, but for now, everybody seems to have settled down, and we'll see what happens.”
Outside of geopolitical concerns, disappointing company earnings and outlooks put traders in a selling mood.
Priceline Group slid 6.9 percent after the online travel booking service issued a profit forecast that was weaker than analysts were expecting. The stock lost $142.20 to $1,906.80.
Disney dropped 3.9 percent, its biggest single-day loss in more than a year, after the media giant reported a weak quarter and said it would pull its movies from Netflix and start two of its own video streaming services.
The stock lost $4.15 to $102.83. Netflix also fell, giving up $2.58, or 1.4 percent, to $175.78.
Shares in several other big media companies also declined. Discovery Communications fell 70 cents, or 2.9 percent, to $23.60. Viacom slid 60 cents, or 1.9 percent, to $30.17.
Fossil tumbled 25.1 percent after the watch maker said sales continued to weaken, falling short of analysts' estimates. The company booked a hefty charge and said its CFO is leaving the company. The stock lost $2.97 to $8.87.
Health care stocks, which have been in a slump, posted gains. Humana rose $4.74, or 1.9 percent, to $254.96.
The geopolitical turmoil appeared to have more of an impact overnight and into early Wednesday.
In Europe, Germany's DAX fell 1.1 percent, while France's CAC 40 slid 1.4 percent. The FTSE 100 index of leading British shares declined 0.6 percent. Major indexes in Asia closed lower. Tokyo's Nikkei 225 tumbled 1.3 percent, while Seoul's Kospi fell 1.1 percent. Hong Kong's Hang Seng was off 0.3 percent.
Benchmark U.S. crude added 39 cents to settle at $49.56 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, gained 56 cents to $52.70 in London.
In other energy futures trading, wholesale gasoline was little changed at $1.62 a gallon, heating oil rose 2 cents to $1.65 a gallon and natural gas rose 6 cents to $2.88 per 1,000 cubic feet.
Silver gained 47 cents, or 2.9 percent, to $16.86 an ounce. Copper fell 2 cents to $2.93 a pound.
The dollar fell to 109.85 yen from 110.48 yen late Tuesday. The euro held steady at $1.1752.