US stocks slid on Tuesday as investors continued to sell phone company and utility shares.
Energy companies rose with the price of oil, but stocks have been locked in an up-and-down pattern for more than a week.
As the dollar weakened, the price of oil rose for the fourth day in a row to sustain a recent recovery and metals prices also rose.
The Labour Department said inflation remains low, as prices paid by consumers were unchanged in July. Most stocks were down, but for the second day in a row, the biggest losses went to traditionally safe investments like telecom and utility companies. Bond prices also inched lower.
The dollar has been very strong over the last few years compared to other currencies.
Early this year it looked like the dollar would stay at those elevated levels because the Federal Reserve was raising interest rates while other global central banks were cutting them to stimulate their economies.
John Cannally, chief economic strategist for LPL Financial, said the Fed has changed course. By leaving interest rates where they are, it has allowed the currency to weaken a bit, aiding US manufacturing and energy companies and other exporters.
"The Fed is using the dollar as sort of a tool of monetary policy," he said. "The Fed wants to give China and emerging markets time to heal and get their houses in order."
The Dow Jones industrial average lost 84.03 points, or 0.5% to 18,552.02. The Standard & Poor's 500 index slid 12 points, or 0.5%, to 2,178.15. The Nasdaq composite fell 34.90 points, or 0.7%, to 5,227.11. Stocks have been setting records recently, but it has been more than a week since they rose for two days in a row. The market hasn't made many big moves over the last month.
The Labour Department said prices paid by consumers were unchanged in July as gas and other energy prices kept inflation down. Core inflation, which leaves out food and fuel prices, inched up just 0.1% for the month. Overall, inflation is up just 0.8% over the last year. That's far below the 2% target set by the Federal Reserve, and investors concluded that means the Fed is less likely to raise interest rates soon.
The dollar fell to 100.25 yen from 101.25 yen. The euro rose to 1.1277 dollars from 1.1183. The weakening dollar boosted energy and metals prices Tuesday. Benchmark U.S. crude added 84 cents, or 1.8%, to 46.58 dollars per barrel in New York. Brent crude, a benchmark used to price international oils, rose 88 cents, or 1.8 percent, to 49.23 dollars a barrel in London. Oil prices climbed last week after steep losses in June and July.
That aided companies like pipeline operator Kinder Morgan, which rose 48 cents, or 2.3%, to 21.78 dollars. Apache Corp. added 1.09, or 2.2%, to 50.97 dollars.
Metals prices also rose. Gold gained 9.40 to 1,456.90 dollars an ounce. Silver added three cents to 19.87 dollars an ounce. Copper edged up two cents to 2.17 dollars a pound. Bond prices dipped and the yield on the 10-year Treasury note rose to 1.58% from 1.56%.
Stocks have wavered lately as investors review mixed reports about the US economy as they try to get a sense of its health. On Tuesday the Federal Reserve said US factories cranked out more cars, machinery and chemicals in July, which suggests manufacturers might be recovering, though growth remains little changed from a year ago and manufacturers are not adding many jobs. Meanwhile the Commerce Department said the pace of home construction grew by the most since February.
Tea maker Hain Celestial Group delayed its quarterly report because of accounting issues and said it doesn't expect to reach its financial projections for the year. The stock tumbled 14.05 dollars, or 26.3%, to 39.35 dollars.
Uniform maker Cintas said it will buy G&K Services, a uniform and facility services maker, for 97.50 dollars a share, or 1.93 billion dollars. G&K Services advanced 14.57 dollars, or 17.7%, to 96.70 dollars and Cintas stock gained 5.57 dollars, or 5.2%, to 112.99 dollars.
Beauty products maker Coty posted results that surpassed expectations, but said little about its purchase of Procter & Gamble's beauty business, a 15 billion dollars deal expected to close in the next few months. Coty said it is "premature" to comment on how the combined business will do. The stock skidded 1.47 dollars, or 4.9%, to 28.28 dollars.
TJX, the parent of T.J. Maxx, Marshalls and other stores, traded lower after saying higher wages and the strong dollar will hurt its results in the third quarter. Its stock gave up 4.80 dollars, or 5.8%, to 77.97 dollars.
Dick's Sporting Goods announced better-than-expected quarterly results and raised its projections for the year. Its stock jumped 3.87 dollars, or 6.1%, to 58.76 dollars.
In other energy trading, wholesale petrol rose two cents to 1.42 dollars a gallon. Heating oil picked up one cent to 1.46 dollars a gallon. Natural gas gained three cents to 2.62 dollars per 1,000 cubic feet.
The CAC 40 in France shed 0.8% and Britain's FTSE 100 lost 0.7%. Germany's DAX fell 0.6%. Japan's Nikkei 225 slid 1.6% as the yen gained against the US dollar. South Korea's Kospi took a 0.1% loss and Hong Kong's Hang Seng index was down 0.1%.