Agence France-Presse
8:10 am | Thursday, May 15th, 2014
US stocks edged lower in early trading Wednesday, May 14, 2014, a day after the stock market closed at a record high. AP/MARK LENNIHAN
NEW YORK—US stocks finished lower following mixed earnings and a surprising rise in producer prices, snapping a five-day winning streak for the Dow that included three straight record closings.
The Dow Jones Industrial Average slumped 101.47 points (0.61 percent) to 16,613.97.
The broad-based S&P 500 fell 8.92 (0.47 percent) to 1,888.53, while the tech-rich Nasdaq Composite Index dropped 29.54 (0.72 percent) to 4,100.63.
Both retailer Macy’s and agricultural equipment manufacturer Deere & Company reported higher earnings than expected, but said sales declined compared with the year-ago period. Macy’s shares were flat while Deere lost 2.0 percent.
The US producer price index, an indicator of inflation, rose 0.6 percent in April, far above analysts’ average estimate of a 0.2 percent rise.
Analysts were nevertheless surprised by the fall in bond yields on a higher inflation indicator: the yield on the 10-year US Treasury bond dropped to 2.54 percent from 2.62 percent Tuesday.
The drop in bond yields “spooked the stock market a little bit,” said Mace Blicksilver, director at Marblehead Asset Management.
Dow member IBM fell 1.8 percent after confirming its medium-term earnings forecasts at an investor day. Cantor Fitzgerald cited “clear progress” on some initiatives, but said “we sense continued investor skepticism around IBM at the meeting.”
Yahoo acquired messaging application Blink for an undisclosed amount. Blink competes with Snapchat by letting people send digital messages, pictures, or voice files designed to erase themselves shortly after being opened. Yahoo shares fell 0.7 percent.
The New York Times Company dropped 4.5 percent on news that Jill Abramson, executive editor of its flagship newspaper, would step down and be replaced by managing editor Dean Baquet.
Investors punished accessory-maker Fossil after it projected second-quarter earnings of 90-97 cents, well below the $1.16 expected by analysts. Shares sank 10.3 percent.
Bond prices rose. The yield on the 30-year fell to 3.38 percent from 3.45 percent. Bond prices and yields move inversely.
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