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Business

Stock Indexes Pull Back Modestly after Strong Three-Week Run

The Dow Jones industrial average declined 10 points

This Monday, July 6, 2015, file photo shows a sign for Wall Street carved into the side of a building in New York, photo: Mark Lennihan
1 year ago

NEW YORK — Stocks were mostly lower in midday trading Tuesday as a three-week rally that brought indexes to all-time highs lost momentum. Netflix and other companies reported disappointing results, and the International Monetary Fund predicted a slowdown in the United Kingdom’s economy following its vote to leave the European Union.

KEEPING SCORE: The Standard & Poor’s 500 index was down 6 points, or 0.3 percent, to 2,161 at 12:26 p.m. Eastern time. All 10 sectors that make up the index fell, led by raw materials producers. The Dow Jones industrial average edged down 10 points, or 0.1 percent, to 18,523. The Nasdaq composite fell 19, or 0.4 percent, to 5,037.

THE RUN THAT WAS: The S&P 500 had surged just over 8 percent since June 27, when stocks hit a bottom following the United Kingdom’s vote. Since then, fears that Britain’s departure would destabilize the global economy have largely dissipated, however a number of questions remain.

The IMF trimmed its forecast for global economic growth this year to 3.1 percent from 3.2 percent, mostly due to anticipated slowdowns in Britain and other advanced economies as a result of the “Brexit” vote.

GLOBAL MARKETS: Japan’s Nikkei 225 index jumped 1.4 percent on a weaker yen and a Pokemon-powered rally in Nintendo shares. France’s CAC 40 was down 0.6 percent, and Germany’s DAX shed 0.8 percent.

HIGHER BILLING, LESS CHILLING: Netflix was the worst-performing stock in the S&P 500, down $13.45, or 13.6 percent, to $85.36. It added fewer subscribers last quarter than it expected, which it blamed on customers leaving before a rate-freeze on their accounts expired.

DEAL TROUBLES: Health insurers fell after Bloomberg News reported that U.S. antitrust officials may move to block two big deals in the industry. Anthem has agreed to buy Cigna, and Aetna hopes to absorb Humana. Each fell more than 2.5 percent. Humana sank $8.10, or 5.1 percent, to $151.54, the second-biggest decline in the S&P 500.

STUBBED: Cigarette maker Philip Morris International fell $3.43, or 3.3 percent, to $99.57 after reporting weaker quarterly results than expected. Smokers in North Africa, Japan, Argentina and elsewhere bought fewer cigarettes, leading to a 5 percent drop in shipments for the company from a year earlier.

HOUSING STRENGTH: Home construction strengthened more in June than economists expected. Activity was particularly high in the Northeast and West, a report from the Commerce Department showed. The June reading on housing starts was the highest since February, though down from a year earlier.

HEALTHY SPOT: Johnson & Johnson rose $1.60, or 1.3 percent, to $124.74. The company also raised its forecast for full-year profits.

SAFETY TRADE: The usual spots that investors have run to when feeling scared were up, but only modestly. The price of gold rose $3.10, or 0.2 percent, to $1,332.40 per ounce. Treasury prices also inched higher. The yield on the 10-year note, which moves in the opposite direction of its price, fell to 1.54 percent from 1.59 percent late Monday.

GLOBAL OUTLOOK: Investors are anticipating a slew of events this week that they’ll assess to get a better read on the health of the world economy and what it might mean for stock markets. The European Central Bank’s policy rate decision is Thursday, and while no extra stimulus is expected, the bank’s views about the economy could create volatility in markets.

ENERGY: The price of crude oil fell 37 cents, or 0.8 percent, to $45.57 per barrel. Brent crude fell 27 cents, or 0.6 percent, to $46.69.

CURRENCIES: The euro fell to $1.1015 from $1.1068, and the British pound fell to $1.3112 from $1.3260. The dollar dipped to 106.06 Japanese yen from 106.12.

STAN CHOE

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