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U.S. Stocks Inch Lower, Dragged Down by Banks, Tech Firms

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05/17/2018 | 04:21pm CEST

By Riva Gold
-- Major stock indexes edge lower
-- Treasury yields hover near recent highs
-- European stocks higher

U.S. stocks edged lower Thursday, as declines among shares of banks and technology companies pulled major indexes down.

The Dow Jones Industrial Average fell 80 points, or 0.3%, to 24687 in early morning trading. The S&P 500 declined 0.2%, while the Nasdaq Composite slipped 0.2%.

Financial stocks came under pressure after The Wall Street Journal reported that some employees in a Wells Fargo unit that handles business banking improperly altered information on documents related to corporate customers, the latest scandal facing the bank. Wells Fargo shares slid 1.6%.

Falling shares of technology companies also pulled major indexes lower, with Cisco Systems among the biggest decliners after the networking giant offered guidance late Wednesday on the rest of the year that wasn't much better than analysts' expectations. Shares of Cisco declined 4.1%.

Energy stocks in the S&P 500 climbed 0.4%, giving the market some support as crude oil prices added 0.5% to $71.80.

Still, most other sectors, including health care, industrials and consumer staples, were all trading lower.

Elsewhere, stocks in Hong Kong and Australia closed lower, while the Stoxx Europe 600 edged up 0.4% as shares of Ocado Group jumped 57% after the U.K. online supermarket said that it has agreed to sell a 5% stake to Kroger and that it would provide its delivery technology to the U.S. grocer.

Rising commodity prices have contributed to higher inflation expectations and thereby pressured the bond market. Yields on 10-year Treasurys rose Thursday to 3.096% from 3.093% late Wednesday, which was the highest settlement since 2011. Yields move inversely to prices.

Some investors worry that higher yields and higher interest rates could hurt stocks by raising borrowing costs for companies and making bonds look more attractive in comparison.

"We think 3.25% would be the number that would cause us to lean a little bit more forward in our chair," said Eric Freedman, chief investment officer at U.S. Bank Wealth Management. Already, more attractive yields on shorter-dated U.S. debt have prompted U.S. Bank to shift some of its investments out of the stock market and into short-term paper, he said.

Earlier, Japan's Nikkei rose 0.5%, supported by a recent decline the yen, which tends to boost earnings of multinationals translating earnings from abroad. The dollar was last up 0.3% against the yen for the day and up 1.3% against the Japanese currency for the week.

Shares elsewhere in Asia mostly ended the day lower. Hong Kong's Hang Seng fell 0.5% despite a rebound in shares of Tencent Holdings, Asia's most valuable company.

Michael Wursthorn contributed to this article.

Write to Riva Gold at [email protected]

Stocks mentioned in the article
ChangeLast1st jan.
DJ INDUSTRIAL -0.24% 24753.09 Delayed Quote.1.19%
HANG SENG -0.51% 30600.18 Real-time Quote.2.75%
NASDAQ 100 0.16% 6960.9188 Delayed Quote.8.83%
NASDAQ COMP. 0.13% 7433.8536 Delayed Quote.7.55%
NIKKEI 225 0.06% 22450.79 Real-time Quote.-1.38%
WTI -0.21% 67.27 Delayed Quote.17.59%
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