US stocks fall in early trading, extending recent losses
By ALEX VEIGA AP Business Writer
July 09, 2019 07:19 AM
FILE – In this May 1, 2019, file photo traders Peter Mancuso, left, and Robert Arciero work on the floor of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EDT on Tuesday, July 9.
Richard Drew, File
Technology and industrial companies helped pull stocks lower on Wall Street in early trading Tuesday, extending losses from a day earlier.
The broad slide marked the third straight day that the market has opened lower, pulling back after a run of record highs last week. Investors have turned cautious as they look for signs of how far the Federal Reserve might cut interest rates after upbeat economic data in recent days.
The market rallied through much of June after the Fed signaled that it’s prepared to cut interest rates to offset slowing global growth and the fallout from U.S. trade conflicts. But an unexpectedly strong U.S. jobs report Friday has dimmed investors’ expectations that the Fed will cut its benchmark interest rate by as much as half a percentage point later this month.
Many investors still expect a cut of a quarter percentage point, but fewer are now expecting a half-point reduction.
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Investors will be listening closely for any hints on the central bank’s interest rate policy on Wednesday and Thursday, when Fed Chair Jerome Powell delivers the Fed’s semi-annual monetary report to Congress.
Chipmakers helped drive the sell-off in technology stocks. Intel dropped 1.2%.
3M was among the biggest decliners in the industrial sector, sliding 2.4%.
Consumer staples stocks and banks also fell. Constellation Brands declined 1.7% and Franklin Resources lost 1.2%.
KEEPING SCORE: The S&P 500 was down 0.2% as of 10:12 a.m. Eastern time. The Dow Jones Industrial Average slid 96 points, or 0.4%, to 26,709. The Nasdaq composite edged up less than 0.1%, while the Russell 2000 index of smaller company stocks dropped 0.2%.
Major stock indexes in Europe headed lower.
EYE ON THE FED: The Fed’s benchmark interest rate currently stands in a range of 2.25% to 2.5% and the central bank has not cut rates since the Great Recession in 2008. Last year, Fed officials raised rates four times, in part to stave off the risk of high inflation and in part to try to ensure that they would have room to cut rates if the economy stumbled.
On Friday, the Fed emphasized that it would act as necessary to sustain the economic expansion, while noting that most Fed officials have lowered their expectations for the course of rates. The Fed’s statement came in its semiannual report on monetary policy.
TECH BUYOUT: Acacia Communications jumped 34.9% after the company agreed to be acquired by Cisco Systems.
APPETIZING DEAL: TreeHouse Foods rose 1.8% after the company said it has reached a deal to sell its snack division to Atlas Holdings for $90 million.