US stocks edge lower after post-election surge
NEW YORK (AP) — Stocks in the U.S. are taking small losses Thursday morning after a big rally the day before. Technology companies are slipping after chipmaker Qualcomm gave a disappointing revenue forecast for the current quarter and homebuilders are down after a weak fourth quarter. Health care companies are broadly higher after a big gain a day ago following the U.S. midterm elections.
The S&P 500 index shed 4 points, or 0.2 percent, to 2,808 as of 11 a.m. Eastern time. The S&P 500 jumped 2.1 percent Wednesday. That was its sixth gain in the last seven trading days, a rally that’s helped stocks make up a lot of the ground they lost in October.
The Dow Jones Industrial Average edged up 15 points, less than 0.1 percent, to 26,200. The Nasdaq composite dipped 23 points, or 0.3 percent, to 7,548 after it surged 2.6 percent a day earlier. The Russell 2000 index of smaller-company stocks fell 2 points, or 0.1 percent, to 1,580.
Stocks climbed Wednesday after the midterm elections generally went the way investors thought they would. The Democrats took control of the House of Representatives while the Republicans held on to a majority in the Senate. That means that politics appears that much less likely to crowd out the performance of the strong U.S. economy. A Federal Reserve meeting ending Thursday is not expected to result in an interest rate hike.
D.R. Horton, one of the largest homebuilders, fell 9.9 percent to $33.85 after its earnings and sales fell short of Wall Street forecasts. The company said rising home prices and mortgage rates are affecting demand. That exact combination has been weighing on home sales and the stocks all year. On Thursday PulteGroup fell 6.2 percent to $23.56 and NVR skidded 4.5 percent to $2,199.
Chipmaker Qualcomm had a stronger-than-expected fourth quarter, but investors were startled by its forecasts for the current period. It’s projecting revenue of $4.5 billion to $5.3 billion, far below the $5.6 billion analysts expected, according to FactSet. Its stock lost 6.3 percent to $59.28.
Apple stopped making royalty payments to Qualcomm following a dispute between the companies, and later decided to stop using Qualcomm modems in some of its products. Qualcomm said both of those changes have hurt its results.
Monster Beverage sank 9.3 percent to $50.72 after it said Coca-Cola is developing two energy drinks that could compete with Monster’s products. The two companies have a partnership, and Monster said it believes Coca-Cola is not allowed to market the new products under that deal. It said Coca-Cola won’t start selling the drinks until April while the companies take the dispute to arbitration.
Bond prices rose. The yield on the 10-year Treasury note rose to 3.21 percent from 3.23 percent. The Federal Reserve will conclude its latest meeting Thursday and it’s not expected to raise interest rates, but traders will examine the central bank’s statement for signs about its plans for the economy. The Fed has been steadily raising rates over the last three years and is expected to increase its benchmark rate again in December.