30° Good Morning
30° Good Morning

Stocks slip after several disappointing earnings reports

Stocks ended a three-day rally Thursday, Feb. 18,

Stocks ended a three-day rally Thursday, Feb. 18, 2016, with small losses. These traders were watching the rally on Feb. 16. Credit: Bloomberg News / Michael Nagle

Stocks dipped Thursday as a three-day rally lost steam. Consumer stocks slipped after Walmart reported disappointing results and cut its sales projections, and bank stocks are giving up some of their recent gains. Investors are applauding IBM’s latest acquisition.

At the close on Wall Street, The Dow Jones industrial average was down 40.4 points, about 0.3 percent, at 16,413.4. The Standard & Poor’s 500 index lost nearly 9 points, about 0.5 percent, to 1,917.8. The Nasdaq composite gave up 46.5 points, about 1 percent, to 4,487.5. The S&P 500 jumped more than 5 percent over the past three days, with banks and consumer stocks making the biggest gains. That rally erased about half of the index’s losses since the beginning of the year.

CRUDE ENERGY: As the markets closed, the price of U.S. benchmark crude oil lost 48 cents, about 1.5 percent, to $32.50 a barrel in trading on the New York Mercantile Exchange. In London, the price of Brent crude, an international benchmark, was off 48 cents, about 1.4 percent, at $34.02 a barrel.

SALES STUMBLE: Walmart said its profit slipped in the fiscal fourth quarter as its sales came in weaker than analysts expected. The retailer now says its net sales this year will be about the same as in 2015. Wal-Mart is struggling with competition from online giant Amazon and other retailers, and in January the company said it would close 269 stores. Its shares are down 27 percent over the last year. Shares closed down $1.99, about 3 percent, at $64.12.

CRUDE WOBBLES: Oil prices fluctuated after a big rally over the last few days. Oil prices opened higher, then slumped after the U.S. government said fuel stockpiles grew last week. Oil prices have surged recently as major oil-producing nations continued to talk about a deal that could limit production.

At least six OPEC nations, including Saudi Arabia, have backed a plan to keep oil production at January’s levels so it won’t increase any further. That would help address a giant supply glut and strengthen prices, which have fallen to their lowest level in about 13 years.

Iran, which has not agreed to the deal and has said it wants to keep increasing its production, said it supports any measure to raise oil prices. Investors saw that as a good sign, but the deal won’t go into effect unless all 13 OPEC members agree to it.

THE QUOTE: The government reported that U.S. energy stockpiles continued to grow last week. Oil inventories grew by 2.1 million barrels and gasoline stockpiles increased by 3 million barrels.

Independent analyst Jim Ritterbusch said people are driving a bit more because the price of gas has plunged, but it’s not a big change, so it’s not helping improve prices.

“It looks like gasoline demand is still soft,” he said. “You can only buy and sell so many SUVs.”

While oil companies have shut down hundreds of oil drilling rigs, it will be months before oil production really slows down because drilling operations have become much more efficient.

UNEMPLOYMENT: Weekly applications for unemployment benefits declined last week to a three-month low, a sign that hiring has remained solid despite big swings in the market. It’s the latest sign that the economy is still growing and consumers are still spending even though the market has been turbulent.

BANKS SLIDE: Financial stocks took the biggest losses Thursday. They had made the largest gains during the three-day rally, as the S&P 500’s financial stock index jumped more than 7 percent. JPMorgan Chase retreated 96 cents, about 1.6 percent, to close at $57.81, and Bank of America fell 32 cents, about 2.6 percent, to close at $12.24.


We're revamping our Comments section. Learn more and share your input.

More news