Big Losses for Railroads Pull Industrial Companies Lower
NEW YORK (AP) — Stock indexes were posting slight losses in early trading on Wall Street Wednesday as a weak showing for railroad operator CSX pulled industrial companies broadly lower.
Banks were also falling as investors worry that lower interest rates will hurt their profits going forward.
Technology stocks bucked the downward trend and put up some solid gains. Qualcomm rose 0.6% following reports that the government asked a court to pause enforcement of an antitrust ruling. Microsoft, Intel and Adobe also rose.
Corporate earnings reports are getting into full swing this week, and investor have been mostly cautious in their assessments of them. Earnings are still expected to decline for S&P 500 companies in the second quarter.
CSX plunged 11.4% after saying it now expects its revenue to decline up to 2% this year, after previously saying it expected growth. Investors read that as trouble for the entire industry and sent the stock of other railroad operators lower. Union Pacific sank 5.2% and Norfolk Southern dropped 5.5%.
Abbott Laboratories gained 4.2% and pushed health care stocks higher after the maker of infant formula and drugs raised its financial forecast for the year. UnitedHealth Group also rose.
Several large companies are scheduled to report earnings later today and throughout the remainder of the week. Netflix will release its results after the market closes, as will IBM. UnitedHealth Group, Phillip Morris and Morgan Stanley are scheduled to release their results Thursday.
KEEPING SCORE: The S&P 500 index fell 0.3% as of 10:30 a.m. Eastern time. The Dow Jones Industrial Average fell 36 points, or 0.1%, to 27,298. The Nasdaq composite fell 0.1%. Small-company stocks did worse than the rest of the market. The Russell 2000 index fell 0.6%.
BLEMISHED FORECAST: Nu Skin Enterprises fell 16.7% after the seller of skin care and nutritional products slashed its profit and revenue forecast for the year. The company and other direct sellers of wellness products are facing increased scrutiny from the Chinese government and that is hampering sales growth. Nu Skin gets 33% of its revenue from China, according to FactSet.
SHARP UNIFORMS: Cintas rose 8.4% after the uniform rental company beat analysts’ profit and revenue forecasts for its fiscal fourth quarter. The company also gave investors a solid profit forecast for its current fiscal year.
By AP reporter Damian J. Troise