US stocks waver as banks fall but smaller companies climb

NEW YORK – U.S. stocks indexes are mixed Thursday as weak results from banks are partly cancelled out by gains for smaller and more domestically-focused companies. Disney and Comcast both rose after Comcast ended its bid to buy most of Twenty-First Century Fox. In testimony before Congress, representatives of the auto industry are speaking out against tariffs on imported cars and car parts proposed by the Trump administration.

KEEPING SCORE: The S&P 500 index slid 5 points, or 0.2 per cent, to 2,809 as of 1:45 p.m. Eastern time. The Dow Jones Industrial Average fell 92 points, or 0.4 per cent, to 25,106. The Nasdaq composite gave up 12 points, or 0.2 per cent, to 7,842. The Russell 2000 index of smaller-company stocks recovered from an early slide and rose 8 points, or 0.5 per cent, to 1,700. Retailers did especially well. More stocks rose than fell on the New York Stock Exchange.

EARNINGS: Second-quarter results and forecasts from U.S. companies continued to dominate trading. EBay slumped 7.5 per cent to $35.12 after reporting revenue that missed forecasts.

American Express fell 2.8 per cent to $100.07 after setting aside more money to cover potential bad loans. AmEx also saw its delinquency rate rise. That could mean that some of American Express’ customers, typically the most creditworthy, are struggling to pay their bills. Bank of New York Mellon lost 5.8 per cent to $52.43.

Companies that make heavy machinery and industrial products continued a strong run. Manufacturing company Dover climbed 4 per cent to $77.17 and tool and diagnostic equipment maker Snap-on picked up 7.1 per cent to $169.48.

Those companies have been hit hard as investors worried that tariffs will hurt their business, but Lindsey Bell, investment strategist with CFRA, said industrials have done very well this quarter. She said many of the companies are raising their profit forecast and plan to increase their spending. However Bell said it’s possible the companies are trying to avoid the effects of the tariffs and that they’ll see a slowdown later this year.

AUTO TARIFFS: Representatives of manufacturers, suppliers and car dealers are in Washington Thursday along with foreign diplomats to testify at a Congressional hearing, seeking to head off the Trump administration’s proposed tariffs on imported cars and car parts. The European Union said it was already preparing measures to retaliate.

The U.S. imported $335 billion in autos and parts in 2017, so those tariffs could dwarf the taxes the administration has placed on imported steel, aluminum, and goods from China.

General Motors slid 1.1 per cent to $39.46 and Tesla dipped 0.7 per cent to $321.58. Auto parts retailer BorgWarner lost 1.5 per cent to $45.33.

THE QUOTE: Bell said most consumers haven’t noticed the effects of the tariffs yet, but that will change if cars are taxed.

“It will significantly increase the price of a car and the consumer will definitely pull back,” she said, adding that foreign automakers with factories in the U.S. might move those jobs overseas.

“There’s a lot of jobs that could be lost if there tariffs go through,” she said.

TRUMP DUMPS ON FED: President Donald Trump told CNBC he is “not happy” the Federal Reserve has been raising interest rates. It’s rare for presidents to criticize the Fed, and Trump suggested he wouldn’t try to get involved in its decision-making. Still, after his remarks the dollar also gave up most of its gains from earlier in the day. It fell to 112.23 yen from 112.84 yen. The euro rose to $1.1668 from $1.1646.

CHANNEL CHANGER: Cable and internet provider Comcast said it won’t make another bid for Twenty-First Century Fox’s entertainment business and will instead focus on trying to buy European pay-TV operator Sky. Comcast had offered as much as $66 billion in cash for those businesses, but Disney topped it with a bid of $71 billion in cash and stock. Fox shareholders are scheduled to vote on Disney’s offer next week.

Comcast gained 2.9 per cent to $35.03 while Fox fell 1.2 per cent to $46.13. Disney gained 2 per cent to $112.90, and in London, shares of Sky fell 1.5 per cent.

CANNED: Aluminum producer Alcoa sank 11.8 per cent to $42.28 after it forecast a smaller pre-tax profit. It said the tax on imported aluminum is costing it $12 million to $14 million a month. Century Aluminum skidded 9.7 per cent to $13.45.

DRUGMAKER DOWNTURN: Companies that make and distribute drugs fell after the Trump administration proposed changes to government rules on drug price rebates. AbbVie fell 5 per cent to $89.72 and drugstore and pharmacy benefits manager CVS Health shed 1.4 per cent to $66.95.

BONDS: Bond prices edged lower. The yield on the 10-year Treasury note fell to 2.84 per cent from 2.87 per cent.

COMMODITIES: Benchmark U.S. crude rose 1.4 per cent to $69.72 per barrel in New York. Brent crude, used to price international oils, fell 0.8 per cent to $72.33 per barrel in London.

Gold fell 0.3 per cent to $1,224 an ounce and silver fell 1.1 per cent to $15.40 an ounce. Copper dropped 2.3 per cent to $2.70 a pound.

OVERSEAS: Germany’s DAX fell 0.6 per cent, as did France’s CAC 40. Britain’s FTSE 100 added 0.1 per cent.

Asian markets finished mostly lower with Japan’s Nikkei 225 losing 0.1 per cent and South Korea’s Kospi shed 0.3 per cent. Hong Kong’s Hang Seng fell 0.4 per cent.

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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