U.S. stocks slide as consumer companies fall
NEW YORK - U.S. stocks are skidding Tuesday and are on track for their biggest drop in more than a month.
Consumer companies are taking big losses as investors worry about the health of the U.S economy. Machinery companies are also down, while concerns about Europe's banks are hurting financial stocks. The price of oil continues to fall.
The Dow Jones industrial average fell 110 points, or 0.6 percent, to 18,294 as of 2:55 p.m. Eastern time. The Standard & Poor's 500 index lost 15 points, or 0.7 percent, to 2,155. The Nasdaq composite slid 43 points, or 0.8 percent, to 5,141. The Dow has fallen for seven days in a row, and the market is on pace for its biggest loss since June 27.
"The market had just rallied... and now it's sort of paused," said Jim Paulsen, the chief investment strategist for Wells Capital Management.
While the Dow and S&P 500 have set records recently, Paulsen said stocks haven't moved very much over the last few weeks and investors are sensitive to signs of economic weakness. On Friday the Labor Department said the U.S. economy grew 1.2 percent in the second quarter, which was far less than experts forecast.
"Any weak reports get magnified," he said.
Auto companies reported lower U.S. sales in July as a heatwave kept buyers at home. General Motors said its sales fell 2 percent and Ford said sales fell 3 percent. Auto sales have reached record levels, and investors are worried that they may have peaked. GM stock shed $1.39, or 4.4 percent, to $29.91 and Ford lost 54 cents, or 4.3 percent, to $11.95.
Cruise line operator Royal Caribbean cut its forecasts for the year as the strong dollar continues to hurt its results. That left Royal Caribbean's stock down $4.31, or 6 percent, to $67.55. Other consumer companies like retailers Nordstrom and Kohl's and office supply chain Staples all stumbled.
Citigroup retreated 72 cents, or 1.6 percent, to $42.71 and Morgan Stanley fell 60 cents, or 2.1 percent, to $27.90. Bank stocks in Europe tumbled for the second day in a row. The losses extended to banks that were effectively given a clean bill of health by the European Banking Authority in last Friday's stress tests.
Industrial and transport companies struggled. Airlines fell after Delta said a revenue measurement fell in July. Delta lost $2.85, or 7.2 percent, to $36.63 and American Airlines lost $2.11, or 5.9 percent, to $33.49. Emerson Electric, which makes valves and process controls systems, posted disappointing quarterly results. It gave up $2.42, or 4.3 percent, to $53.36. Tech stocks also lost ground. Apple fell $1.38, or 1.3 percent, to $104.67 and electronic storage company Seagate Technology slid $1.85, or 5.7 percent, to $30.58 despite a solid quarterly report.
Oil prices continued to drop, extending a slide that has lasted more than two weeks. Benchmark U.S. crude fell 55 cents, or 1.4 percent, to $39.51 in New York. U.S. crude hadn't closed under $40 a barrel since April 8. Brent crude, which is used to price international oils, sank 43 cents, or 1 percent, to $41.71 a barrel London.
The price of oil climbed from about $26 a barrel in February to $51 in early June, and it's now given up about half of its gains during that steep rise.
Wholesale gasoline rose 1 cent to $1.31 a gallon. Heating oil held steady at $1.26 a gallon. Natural gas fell 4 cents to $2.73 per 1,000 cubic feet.
The price of gold rose $13, or 1 percent, to $1,372.60 an ounce, and silver jumped 20 cents, or 1 percent, to $20.70 an ounce. Copper added 1 cent to $2.21 a pound.