Stocks ended lower Thursday, breaking a nine-day winning streak for the Dow Jones industrial average. Industrial companies had some of the biggest losses. Railroad operator Union Pacific gave up 3 percent and Kinder Morgan fell 5 percent. Southwest Airlines dropped 11 percent and Intel fell 4 percent after both companies reported disappointing results.
ON WALL STREET: At the close, the Standard & Poor’s 500 index lost 7.9 points, about 0.4 percent to 2,165.2. The Dow Jones industrial average lost 77.8 points, about 0.4 percent, to 18,517.2. The Nasdaq composite gave up 16 points, about 0.3 percent, to nearly 5,074.
OIL PRICES: Energy stocks fell along with the price of crude oil. As markets closed, the price of U.S. crude oil was down $1.17 to $44.58 a barrel on the New York Mercantile Exchange. In London, Brent crude, the international benchmark, fell $1.10 to $46.07 a barrel.
DIVIDEND DIP: Low bond yields in recent years have pushed investors to find income in other areas of the market, such as dividend-paying stocks. But when bond yields rise, it can mean less interest for these bond replacements, and the highest-yielding areas of the stock market had some of the weakest performances. Telecom and utility stocks both lagged the market.
HOW MUCH HIGHER? Stocks have climbed steadily upward since hitting a bottom nearly a month ago, aided by better-than-expected reports on corporate earnings and the U.S. economy. But while the data has often topped analysts’ forecasts, they still haven’t been all that strong. Corporate earnings likely weakened last quarter, for example, and the U.S. economy is still growing at a weaker rate than before the Great Recession. That could keep stocks hemmed in, says Rich Weiss, senior portfolio manager at American Century.
“It’s a confounding market,” he said. “This is a case where the U.S. stock market is the only place to go. It’s the best relative purchase out of markets.”
Even though stock prices may look expensive relative to how much profit companies are earning, Weiss said U.S. stocks can stay high because foreign stocks and bonds look even less attractive.