Losses for tech and health companies take U.S. stocks lower
NEW YORK — U.S. stocks retreated Wednesday as technology, health care and consumer-focused stocks all traded lower. Investors weren’t thrilled with Apple’s first-quarter results, which included lower-than-expected iPhone sales. The Federal Reserve had a policy meeting, although investors aren’t expecting it to raise interest rates.
KEEPING SCORE: The Standard & Poor’s 500 index slipped 8 points, or 0.4 percent, to 2,382 as of 11:33 a.m. Eastern time. The Dow Jones industrial average lost 52 points, or 0.3 percent, to 20,897. The Nasdaq composite sank 38 points, or 0.6 percent, to 6,057. The Russell 2000 index, which tracks smaller companies, declined 11 points, or 0.8 percent, to 1,388.
APPLE ON HOLD: Apple dipped after its first-quarter iPhone sales and projections for the current quarter weren’t quite as good as analysts hoped. Apple stagnated in late 2015 and for much of 2016 as iPhone sales slowed down and then fell for the first time. Apple’s stock and it sales have rallied in recent months.
Apple is up 26 percent this year and recently set all-time highs. The rally was interrupted Wednesday as the stock slipped $1.61, or 1.1 percent, to $145.90.
Other technology companies that traded lower after releasing earnings included cloud services provider Akamai Technologies and Automatic Data Processing. Akamai forecast weak revenue in the second quarter as demand from gaming customers slows, and its stock gave up $9.90, or 15.8 percent, to $52.60. Payroll and human resources company ADP lost $5.08, or 4.9 percent, to $98.94 after it said it didn’t book as much new business.
FED WATCH: Investors don’t expect the Federal Reserve to raise interest rates this month, but they will watch its statements closely for hints of when the next increase might come. Experts think it’s likely the central bank will raise rates in June, as it did last December and again in March.
FEELING A CHILL: Health care companies traded lower. Biotech drugmaker Gilead Sciences reported disappointing profit and revenue as sales of its hepatitis C drugs Sovaldi and Harvoni plunged in all major markets, and its stock gave up $1.57, or 2.3 percent, to $67.02.
Irish generic drug maker Perrigo said its offices were searched as part of a Justice Department investigation into pricing by generic drug companies. Perrigo dropped $5.87, or 7.7 percent, to $70.36.
Several other companies have previously disclosed subpoenas connected to that probe, including Mylan and Lannett. Mylan fell $1.46, or 3.8 percent, to $36.71. Lannett reported results that missed forecasts as drug pricing remained weak, and the stock tumbled $5.41, or 19.9 percent, to $21.74.
CRAFTING NEW LEADERSHIP: Online crafts marketplace Etsy replaced its CEO and said it will cut jobs as it faces pressure from shareholders upset with its lackluster profits and anemic stock performance. Chad Dickerson stepped down as CEO and chairman as the company named board member Josh Silverman as its new CEO. Etsy will also cut around 80 jobs, or 8 percent of its staff, to reduce costs. The stock gave up $1.10, or 9.7 percent, to $10.29.
DELPHI HIGH: Vehicle parts maker Delphi Automotive surged after it said it will spin off its powertrain systems business into a separate publicly traded company. It expects to finish that move by next March. Investors often applaud such transactions, which are tax-free, because they can help fast-growing businesses concentrate on their own growth. Delphi stock added $7.10, or 9.1 percent, to $85.55.
ENERGY: U.S. benchmark crude dipped 7 cents to $47.61 a barrel in New York. Brent crude, used to price international oils, rose 6 cents to $50.52 a barrel in London. On Tuesday U.S. crude oil closed at its lowest price since mid-November.
SKUNKY: Molson Coors’ first-quarter profit fell far short of expectations as it costs increased, and the brewer also said sales in the U.S. fell at the beginning of the year. Its stock slid $4.80, or 5.5 percent, to $90.56.
DEALS: Wireless spectrum license company Straight Path Communications continued to soar. It said it’s received an all-stock offer worth $135.96 per share from an undisclosed buyer. AT&T had agreed to pay $95.63 per share. The company said it informed AT&T that the new offer is superior, and AT&T will have three days to decide if it wants to raise its offer.
Straight Path’s stock jumped $27.83, or 22.1 percent, to $153.65.
Insurer OneBeacon agreed to be bought by Canada’s Intact Financial Corp. for $18.10 a share, or $1.7 billion. Its stock jumped $2.54, or 16.1 percent, to $18.24.
BONDS: Bond prices inched lower. The yield on the 10-year Treasury note rose to 2.30 percent from 2.29 percent.
CURRENCY: The dollar rose to 112.34 yen from 112 yen. The euro slid to $1.0907 from $1.0928.
OVERSEAS: The British FTSE 100 retreated 0.3 percent and France’s CAC 40 lost 0.1 percent. The DAX of Germany was unchanged. Markets in Japan, Hong Kong and South Korea were closed for a holiday.