U.S. stocks are lower at midday Tuesday after technology companies gave up an early gain. Banks are also down, while health care companies climb. Qualcomm is skidding after President Donald Trump blocked a bid for the chipmaker by Singapore-based rival Broadcom. Trump said he opposed the deal because it could have been detrimental to national security. The Labor Department said inflation remained in check last month.
KEEPING SCORE: The S&P 500 index lost 8 points, or 0.3 percent, to 2,774 as of 12:25 p.m. Eastern time. The Dow Jones industrial average slid 86 points, or 0.3 percent, to 25,092. The Nasdaq composite fell 51 points, or 0.7 percent, to 7,536. That threatened a seven-day winning streak that took the technology-heavy index to record highs. The Russell 2000 index of smaller-company stocks dipped 7 points, or 0.5 percent, to 1,593.
BROADCOM BLOCKED: Broadcom had been trying to buy Qualcomm for several months, most recently offering $117 billion. The deal would have been the largest in the history of the technology industry, although Qualcomm was trying to fend it off. While Trump’s decision followed a recommendation from the Committee for Foreign Investment in the U.S., analysts said the move was unusual: Daniel Ives of GBH Insights called it “unprecedented” and said Qualcomm stock may be stuck around $60 for an extended period.
Qualcomm slid $2.91, or 4.6 percent, to $59.90. Broadcom picked up 74 cents to $263.58. Intel, a competitor, added 78 cents, or 1.5 percent, to $52.30. The Wall Street Journal reported Friday that Intel wanted to stop the deal and might try to buy Broadcom to make that happen.
Qualcomm is one of the biggest makers of processors that power smartphones and other mobile devices. The takeover bid came as other countries are also getting ready to build faster “5G” wireless networks.
“Details of the security risk are likely around 5G cellular technology which Qualcomm, in our view, is well ahead of foreign and domestic competitors,” said Stifel analyst Kevin Cassidy.
DEAL DANGER: Trump also cited national security risks this month in announcing tariffs on imported aluminum and steel, and investors appeared to be wondering if at least one other deal will face new obstacles. In November, Bermuda-based chipmaker Marvell Technology Group agreed to buy competitor Cavium for $6 billion. Cavium lost $3.72, or 4.1 percent, to $87.23; while Marvell lost $1.32, or 5.8 percent, to $23.05
TECH TRIPPED UP: Microsoft lost $1.74, or 1.8 percent, to $95.03; and Facebook fell $2.79, or 1.5 percent, to $181.97. Chipmakers also mostly traded lower. Skyworks Solutions lost $2.39, or 2.1 percent, to $112.77.
PRICES RIGHT: The government said prices paid by consumers rose 0.2 percent in February, matching estimates. Excluding food and energy costs, prices have risen 1.8 percent in the last year. Prices had jumped in January. Over the last month, investors have worried about the prospect of faster inflation, but Tuesday’s price report and the monthly jobs report on Friday suggest that inflation isn’t moving any more rapidly than it did in the recent past.
With investors expecting slower gains in rates, bond yields headed lower. The yield on the 10-year Treasury note slipped to 2.85 percent from 2.87 percent. Faster inflation would likely result in the Fed raising interest rates more quickly. Investors feared that could significantly slow the economy and the market’s gains.
Lower yields mean lower interest rates, and that pulled bank stocks lower on Tuesday. JPMorgan Chase shed 83 cents to $116.83, and Bank of America declined 30 cents to $32.54.
Companies that are considered bond proxies, like phone companies and utilities, traded higher. They often move in the opposite direction of bond yields because investors buy them for their big dividend payments when yields fall.
FEELING GOOD: Health care companies rose. Health care products maker Johnson & Johnson climbed $2.55, or 1.9 percent, to $135.18; while drugmaker AbbVie gained $2.57, or 2.2 percent, to $120.87.
EARNINGS: Dick’s Sporting Goods slumped after the chain reported disappointing holiday sales. Like many companies, Dick’s is trying to fend off competition from Amazon.com and other online sports gear sellers. The stock lost 82 cents, or 2.5 percent, to $31.74. Other sporting goods companies also fell. Shoe and athletic gear maker Under Armour dipped 48 cents, or 2.8 percent, to $16.70; and retailer Finish Line slumped 32 cents, or 3 percent, to $10.23.
ENERGY: Benchmark U.S. crude slumped 92 cents, or 1.5 percent, to $60.44 a barrel in New York. Brent crude, used to price international oils, lost 51 cents to $64.44 per barrel in London.
CURRENCIES: The dollar rose to 106.52 yen from 106.35 yen. The euro rose to $1.2401 from $1.2336.
OVERSEAS TRADING: Germany’s DAX shed 1.5 percent. Britain’s FTSE 100 lost 0.6 percent while the CAC 40 in France slid 0.9 percent.
The Japanese Nikkei 225 index gained 0.7 percent, and the Kospi of South Korea added 0.4 percent. In Hong Kong, the Hang Seng was unchanged.