U.S. Stocks Waver as Earnings and Central Banks Dominate

U.S. Stocks, Waver, Earnings, Central Banks
The floor of the New York Stock Exchange, Thursday. (AP Photo/Richard Drew)

U.S. stocks are wavering between small gains and losses in early afternoon trading Thursday as some weak earnings put a dent in industrial and basic materials companies. Health care companies including Abbott Laboratories are rising as investors focus on quarterly results as well as the latest commentary from the European Central bank, which left its key interest rate unchanged. Major stock indexes closed at record highs a day earlier.

KEEPING SCORE: The Standard & Poor’s 500 index added 1 point to 2,474 as of 12:15 p.m. Eastern time. The Dow Jones industrial average dipped 31 points, or 0.1 percent, to 21,609. The Nasdaq composite rose 9 points, or 0.1 percent, to 6,393. The Russell 2000 index of smaller companies held steady at 1,442.

NOT PAINTING THE TOWN RED: Paint and coatings maker PPG Industries fell after it reported weaker-than-expected sales. PPG said higher raw materials costs hurt its results, and so did unfavorable foreign currency exchange rates. Its shares gave up $6.63, or 5.8 percent, to $106.97.

Competitor Sherwin-Williams had a weak second quarter and also said rising costs affected its results. The stock recovered from a sharp early loss but was still down $6.97, or 2 percent, to $352.81.

HEALTHY, WEALTHY: Abbott Laboratories — which makes infant formula, drugs and medical devices — gained $1.09, or 2.2 percent, to $50.52 after reporting results that were better than expected. Health care products giant Johnson & Johnson rose $1.36, or 1 percent, to $136.57; and Merck climbed 47 cents to $63.09. Drugmaker AbbVie — which split from Abbott in 2013 — added $1.09, or 1.5 percent, to $73.86.

CENTRAL BANKS: The European Central Bank will continue to buy bonds and isn’t cutting back on its stimulus policies. ECB President Mario Draghi stressed that the bank has not set a date for considering any changes to those policies. Last month Draghi discussed gradual reductions in stimulus as Europe’s economy gets stronger, and investors had a strong reaction. They pushed the euro higher, and yields on long-term bonds also jumped. European bond yields slumped Thursday after Draghi’s remarks.

Japan’s central bank left its monetary stimulus intact while downgrading its outlook for inflation. The Bank of Japan has been injecting trillions of yen into the economy each year through government bond purchases.

AVISTA IN VIEW: Utility company Avista surged after it accepted an offer from Hydro One, the largest power transmitter and distributor in Ontario. It will buy Avista for $5.3 billion, or $53 a share; and Avista stock climbed $8.62, or 19.9 percent, to $51.95.

EARNINGS ROLL CALL: Trucking company C.H. Robinson reported a smaller profit than analysts expected; and its stock dropped $3.88, or 5.6 percent, to $64.81. Equipment rental company United Rentals said the amount of equipment being rented climbed in the latest quarter, and it raised its sales forecast for the year. Its stock gained $3.50, or 3 percent, to $122.20.

RELIEF FOR SEARS: Sears soared after the retailer said it will begin selling Kenmore appliances on Amazon.com, including smart appliances that can be synced with Amazon’s voice assistant, Alexa. The owner of the Sears and Kmart chains has closed large numbers of stores in recent years and said in March that it might not be able to stay in business. Its stock jumped $1.62, or 18.7 percent, to $10.29, while Amazon picked up $5.85 to $1,032.72. Even with Thursday’s climb, Sears stock is down 31 percent over the last year.

STEADY AS SHE GOES: While stocks have been setting record highs for most of this year, the market is having its quietest year in generations. There have been almost no big moves, as the S&P 500 has risen or fallen 1 percent just four times this year. In a typical year, that happens more than 50 times. It’s also been nearly a year and a half since the last stock market “correction,” or a slip of 10 percent from a recent peak. Those typically happen about once a year.

The S&P 500 is up 10.5 percent this year, which is roughly equal to its average gain for a full year.

OIL: Benchmark U.S. crude added 23 cents at $46.89 a barrel in New York; and Brent crude, the standard for international oil prices, lost 25 cents to $49.45 a barrel in London. That helped pull energy companies lower.

BONDS: Bond prices moved higher. The yield on the 10-year Treasury note fell to 2.24 percent from 2.27 percent. High-dividend stocks like utilities mostly climbed, as reduced bond yields make those stocks more appealing to investors who want income.

CURRENCIES: The dollar declined to 111.64 yen from 111.78 yen. The euro gained to $1.1636 from $1.1517.

OVERSEAS: Britain’s FTSE 100 index advanced 0.8 percent while the French CAC 40 lost 0.3 percent. The DAX in Germany was little changed. The Nikkei 225 of Japan advanced 0.6 percent, and South Korea’s Kospi gained 0.5 percent. The Hang Seng in Hong Kong rose 0.3 percent.

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