US stock indexes edge slightly lower while oil prices surge
A slide in technology and consumer-focused companies helped pull US stock indexes modestly lower on Thursday, offsetting strong energy sector gains.
A broad range of retailers, from department stores to fast-food chains, also notched losses, while most of the big gainers were oil production and drilling companies.
They got a boost from a report indicating fuel stockpiles fell precipitously last week. The price of US crude also jumped on the report, and closed nearly 5% higher.
US bond yields also surged, as traders reacted to the European Central Bank's decision to leave its key interest rates unchanged and hold off on extending a stimulus programme.
Still, in the absence of any major new economic data, the stock indexes continued a recent pattern of mostly sluggish trading.
"It's been many, many days since we've had a substantive move either to the upside or the downside in the market," said Erik Davidson, chief investment officer for Wells Fargo Private Bank. "It still feels like a holiday week."
The Dow Jones industrial average lost 46.23 points, or 0.3%, to 18479.91. The Standard & Poor's 500 index slid 4.86 points, or 0.2%, to 2181.30.
The sell-off in technology stocks weighed on the Nasdaq composite index, which fell 24.44 points, or 0.5%, to 5259.48. The tech-heavy index set all-time highs on Tuesday and Wednesday.
Apple slid 2.6% a day after the consumer electronics giant introduced its newest slate of products. The stock shed 2.84 dollars (£2.14) to 105.52 dollars (£79.33).
Investors also got a dash of tech sector deal news. Hewlett Packard Enterprise agreed to spin off part of its business software unit to Micro Focus in a deal valued at 8.8 billion dollars (£6.6 billion).
The pact calls for HP Enterprise to remain majority owner of the new company. Shares in HP Enterprise slid 71 cents (£0.53), or 3.2%, to 21.38 dollars (£16.41).
Separately, Intel said it will spin its cybersecurity business into a new company called McAfee for 3.1 billion dollars (£2.3bn) in cash.
Private equity firm TPG will invest 1.1 billion dollars (£830,000) in the new company and own a majority stake. Intel slipped 2 cents to 36.44 dollars (£27.39).
All told, technology stocks were the biggest decliner in the S&P 500, shedding 0.9%. The sector is up 9.1% this year.
"The tech sector has been strong and outside of today continues to be strong," said Willie Delwiche, an investment strategist at Baird.
Investors hammered retailers Tractor Supply and Pier 1 Imports.
Tractor Supply slumped 16.9% after the farming and hardware goods retailer said its business is being hurt by poor economic conditions in rural, energy-producing areas where it does most of its business, and other factors.
The stock was the biggest decliner in the S&P 500 index, shedding 14.15 dollars (£10.64) to 69.38 dollars (£52.50).
Pier 1 Imports tumbled 15% after the home decor retailer gave weak quarterly guidance and said its president and chief executive will leave the company at the end of the year. The stock slid 72 cents (£0.53) to 4.08 dollars (£3.07).
Several oil drilling and production companies rose on the latest oil stockpiles figures, pushing the S&P 500's energy sector 1.7% higher. The sector is up 17.4% this year.
The news out of the European Central Bank (ECB) helped ease demand for US bonds, driving their prices lower and pushing yields higher. The yield on the 10-year Treasury rose to 1.6% from 1.54% late on Wednesday.
"They're not adding more stimulus, and that maybe makes people feel less like they need to pile into US bonds," said Mr Delwiche.
At a news conference, ECB president Mario Draghi seemed relatively confident about the economy and less inclined to hint at more stimulus than some analysts had expected. He urged governments to do their part.
Despite Mr Draghi's more confident tone, the ECB will have to take more stimulus action at its October or December meetings, analysts said.
News of the ECB's decisions weighed on most of Europe's major stock indexes. Germany's Dax fell 0.7%, while France's CAC-40 declined 0.3%. The FTSE 100 index of leading British shares rose 0.2%.