Belfast Telegraph

US stocks struggle as slowing car sales worry Wall Street

US stocks have failed to get any momentum going after car makers said their sales are shrinking.

Engine maker Cummins sent manufacturers and other industrial companies higher after reporting solid first-quarter earnings.

A late slump took the price of oil to its lowest price in almost six months.

Ford, General Motors and Fiat Chrysler shares all fell after they said sales declined in April.

Chris Zaccarelli, chief investment officer for Cornerstone Financial Partners, said car sales have weakened because lenders are growing a bit hesitant to make loans to help people buy cars.

"It's more a story specific to the auto sector as opposed to a slowdown in consumer spending," he said.

Thanks to an upturn in the last few minutes of trading, the Standard & Poor's 500 index rose 2.84 points, or 0.1%, to 2391.17.

The Dow Jones industrial average added 36.43 points, or 0.2%, to 20949.89.

The Nasdaq composite set another record as it picked up 3.76 points, or 0.1%, to 6095.37.

The Russell 2000 index of small-company stocks sank 8 points, or 0.6%, to 1399.36.

The six largest car makers in the US all said their sales fell in April.

Vehicle sales have set records the last few years and analysts are worried the streak is ending and car companies are relying too much on discounts and incentives to keep their sales numbers high.

Ford lost 50 cents (£0.39), or 4.4%, to 10.92 US dollars (£8.44) and GM gave up 1 dollar (£0.77), or 2.9%, to 33.20 dollars (£25.66) while Fiat Chrysler skidded 49 cents (£0.38), or 4.3%, to 10.92 dollars (£8.44).

Car retailers, rental companies and parts suppliers slipped as well.

Industrial companies made some of the biggest gains.

Cummins reported a far bigger profit and better sales than analysts expected, and its stock climbed 9.23 dollars (£7.13), or 6.1%, to 160.56 dollars (£124.16).

The company said demand from construction and mining sales grew compared with the same period a year ago, but truck production in North America fell.

Benchmark US crude lost 1.18 dollars (£0.91), or 2.4%, to 47.66 dollars (£36.83) a barrel in New York.

That is its lowest price since mid-November.

Brent crude, used to price international oils, shed 1.06 dollars (£0.82), or 2.1%, to 50.46 dollars (£39.14) a barrel in London.

Bond prices headed higher. The yield on the 10-year Treasury note fell to 2.28% from 2.32%.

The dollar rose to 112 yen from 111.83 yen. The euro rose to 1.0928 dollars from 1.0906 dollars.

In Greece the Athex composite jumped 3.1% after the country and its creditors agreed Greece should make another round of pension cuts in 2019 and commit to a budget target when its current bailout programme ends next year.

That deal will restart bailout loan payments to Greece, meaning it will not face default.

That could have touched off another eurozone crisis.

Other European stocks also rallied.

The CAC 40 in France added 0.7% while the FTSE 100 index gained 0.6%. In Germany, the DAX rose 0.6%.

The Japanese Nikkei 225 index advanced 0.7% and South Korea's Kospi gained 0.7%. The Hang Seng in Hong Kong added 0.3%.