Stocks slip as investors seek safety after weak sales data
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NEW YORK (AP) — U.S. stocks dipped Wednesday as investors worried about weak retail sales and oil prices sank. The Federal Reserve raised interest rates for the third time in six months.
The Commerce Department said retail spending decreased in May, which surprised experts. Investors reacted by buying traditionally safe assets like government bonds and high-dividend companies while selling stocks from other industries that depend more on economic growth. Bond yields hit their lowest level of 2017. Oil prices also hit an annual low after the government’s weekly report on oil stockpiles.
In the last few weeks Wall Street has been disappointed by several economic reports. That did not appear to change the Fed’s thinking even though higher interest rates tend to slow down economic growth. For years investors have been hoping growth will hit a faster pace.
The Standard & Poor’s 500 index slid 2.43 points, or 0.1 percent, to 2,437.92. The Dow Jones industrial average rose 46.09 points, or 0.2 percent, to a record 21,374.56. Home Depot and Goldman Sachs contributed most of the blue-chip index’s gain. After a late tumble in technology stocks, the Nasdaq composite lost 25.48 points, or 0.4 percent, to 6,194.89.
Small-company stocks fell more than the rest of the market. The Russell 2000 index sank 8.41 points, or 0.6 percent, to 1,417.57. That suggests investors are worried about the economy, which could have an outsize effect on smaller, domestically-focused companies.
The Federal Reserve raised interest rates for the third time since December, something investors widely expected based on the Fed’s recent statements. Fed leaders suggested they still expect to raise rates again later in the year.
Bond prices jumped. The yield on the 10-year Treasury note fell to 2.13 percent from 2.21 percent. Earlier, the 10-year note hit its lowest level since November.
Oil futures plunged after the U.S. government said oil supplies shrank only slightly last week while gasoline stockpiles grew. Benchmark U.S. crude fell $1.73, or 3.7 percent, to settle at $44.73 a barrel in New York. Brent crude, used to price international oils, shed $1.72, or 3.5 percent, to close at $47 a barrel in London.
The dollar slid to 109.53 yen from 109.96 yen. The euro edged up to $1.1220 from $1.1212.
Gold rose $7.30 to $1,275.90 an ounce. Silver jumped 37 cents, or 2.2 percent, to $17.14 an ounce. Copper slipped 2 cents to $2.57 a pound.
In other energy trading, wholesale gasoline sank 7 cents, or 4.5 percent, to $1.43 a gallon. Heating oil lost 4 cents, or 2.6 percent, to $1.41 a gallon. Natural gas fell 3 cents, or 1.1 percent, to $2.93 per 1,000 cubic feet.
Germany’s DAX advanced 0.3 percent and the CAC-40 in France lost 0.4 percent. The British FTSE 100 fell 0.3 percent. Tokyo’s Nikkei 225 retreated 0.1 percent and the Hang Seng Index in Hong Kong advanced 0.1 percent. In South Korea the Kospi retreated 0.1 percent.
