US stocks inch lower on Europe worries; tech stocks sink

By MARLEY JAY
AP Markets Writer

NEW YORK (AP) – U.S. stocks are down Friday as investors take a more cautious approach after a report said the European Central Bank will make a decision about reducing its economic stimulus in October. A 10-day winning streak for technology companies fades and General Electric slumped after the company issued a weak forecast.

KEEPING SCORE: The Standard & Poor’s 500 index lost 3 points, or 0.1 percent, to 2,470 as of 2:20 p.m. Eastern time. The Dow Jones industrial average sank 41 points, or 0.2 percent, to 21,570. Earlier it fell as much as 108 points. The Nasdaq composite lost 11 points, or 0.2 percent, to 6,378. The Russell 2000 index of smaller-company stocks dipped 6 points, or 0.4 percent, to 1,436. All four indexes remained near record highs.

POWER DOWN: General Electric tumbled after the company disappointed investors by saying it expects to reach only the low end of its annual profit forecast. GE said its power unit struggled in the second quarter and low oil prices are also hurting its business.

The stock fell 83 cents, or 3.1 percent, to $25.86. It’s down 18 percent this year. Also falling was oilfield services company Baker Hughes, which is combined with GE’s oil and gas unit this month and is now mostly owned by GE. It shed 91 cents, or 2.6 percent, to $34.06.

EUROPE: European stock indexes sank after Reuters reported that the European Central Bank will consider paring back its stimulus programs in late October. Over the last few weeks investors have focused on the bank and what it will do as the European economy continues to improve. The ECB has helped prop up the European economy and stock markets by buying government bonds and keeping interest rates at zero, and investors are nervous about what will happen as its policies change.

ECB President Mario Draghi said Thursday the bank hasn’t even set a date for considering changes. Investors were somewhat relieved by that, but it was undercut by Friday’s developments. The German DAX lost 1.7 percent and France’s CAC 40 shed 1.6 percent. The FTSE 100 in Britain shed 0.5 percent.

European bond prices jumped and yields tumbled. Investors also bought U.S. government bonds, which sent prices higher. The yield on the 10-year Treasury note fell to 2.23 percent from 2.26 percent.

TECH BACK ON TOP: Software giant Microsoft’s fourth-quarter profit and sales surpassed Wall Street estimates as the company posted another round of strong results from its cloud computing business. However its stock dipped 98 cents, or 1.3 percent, to $73.24.

Technology stocks are coming off their longest winning streak in two years. The S&P 500 technology index has climbed more than 6 percent over that time and reached record highs. The rally was assisted by the weakening dollar, which helps sales and earnings overseas. Investors also bet that technology companies would have another round of strong quarterly earnings.

Also falling was Alliance Data Systems, which manages loyalty and rewards programs. It lost $4.46, or 1.9 percent, to $234.16 and e-commerce company eBay fell 77 cents, or 2.1 percent, to $36.41.

LOOKING SNAPPY: Uniform rentals company Cintas came out ahead of analyst estimates in its fiscal fourth quarter, and it forecast a much larger annual profit than investors expected. The stock jumped $10.06, or 7.9 percent, to $136.84.

FOOD SCARE: Chipotle Mexican Grill fell to its lowest price in more than four years as the company once again had to deal with reports of customers getting sick. Health official said Wednesday that one person who reported eating at a northern Virginia Chipotle tested positive for norovirus. Another 60 people who said they ate there have also gotten sick, although authorities say they have not confirmed a link.

Chipotle dropped $9.83, or 2.8 percent, to $346.22. The stock has plunged this week, and it’s lost more than half its value since October 2015 as the restaurant chain dealt with the fallout of an E. coli outbreak that damaged its sales.

ENERGY: Energy companies fell with oil prices. Benchmark U.S. crude lost $1.19, or 2.5 percent, to $45.73 a barrel in New York. Brent crude, the standard for international oil prices, shed $1.21, or 2.5 percent, to $48.09 a barrel in London.

IN THE MONEY: Financial companies did relatively well after some solid quarterly reports. Credit card issuer Capital One Financial leaped $6.48, or 84 percent, to $87.49 after it beat Wall Street estimates in the second quarter. E-Trade Financial gained $1.90, or 4.8 percent, to $41.51 and Moody’s added $6.24, or 4.9 percent, to $133.41.

METALS: Gold added $9.40 to $1,254.90 an ounce. Silver rose 11 cents to $16.46 an ounce. Copper picked up 1 cent to $2.72 a pound.

CURRENCIES: The dollar slid to 111.09 yen from 111.99 yen. The euro rose to $1.1681 from $1.1626.

ASIA: The Nikkei 225 of Japan slipped 0.2 percent and South Korea’s Kospi rose 0.3 percent. Hong Kong’s Hang Seng inched down less than 0.1 percent to 26,729.08.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jay

Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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