US stocks are mixed in wobbly trading as costs, rates rise

NEW YORK (AP) – U.S. stocks are wobbling Wednesday as investors continued to worry that growing costs for critical materials along with rising interest rates will affect profit growth for companies. U.S. bond yields are rising again and setting four-year highs while oil prices are at three-year highs. Stock indexes in Europe and Asia are also falling after U.S. indexes took a steep drop the day before.

KEEPING SCORE: The S&P 500 index edged up a point to 2,636 as of 2:43 p.m. Eastern time. The Dow Jones industrial average was up 39 points, or 0.2 percent, at 24,060. It was down as much as 201 points earlier. The 30-stock index has fallen for five days in a row, its longest losing streak in more than a year. It’s down 3 percent over that time.

The Nasdaq composite declined 3 points, or 0.1 percent, to 7,003. The Russell 2000 index of smaller-company stocks dipped 1 point to 1,552.

Almost two-thirds of the stocks on the New York Stock Exchange were trading lower. Banks, technology, health care companies fell while energy companies turned higher.

PAYING THE COST: Stocks slumped Tuesday after heavy machinery maker Caterpillar said it doesn’t expect to top its first-quarter earnings for the rest of this year. Company profits fuel the stock market, and when they are rising, stocks tend to do well. Investors expected strong profit growth this year thanks to the growing global economy and the corporate tax cut President Donald Trump signed at the end of 2017. That optimism helped send stocks to record highs in January.

The comments from Caterpillar’s executives, as well as from other major companies like 3M and Sherwin-Williams, had investors worrying about whether that growth will show up. On Wednesday Goodyear Tire & Rubber said higher raw materials costs and weaker demand hurt its business in the first quarter. Its stock fell 4.9 percent to $25.54.

THE QUOTE: Invesco Chief Global Market Strategist Kristina Hooper said investors are starting to worry that the market’s best days are behind it. She noted that wages are rising, as unemployment has been at multi-decade lows for the last few years. That means costs for companies are up. Oil prices have also jumped and investors are worried that new tariffs will also drive up costs and affect company earnings in the months to come.

“I wouldn’t be surprised if earnings peaked by the end of this year, but certainly they haven’t peaked yet,” she said.

INDUSTRIALS: Industrial companies were mixed. Defense contractors General Dynamics and Northrop Grumman declined after their first-quarter reports, while aerospace company Boeing topped Wall Street’s estimates and raised its forecasts for the year. General Dynamics fell 3.6 percent to $214 and Grumman lost 2.8 percent to $331.91. Boeing rose 3.8 percent to $341.53. Railroad operator Norfolk Southern also climbed 6 percent to $143.03 after it, too, surpassed analyst projections.

BONDS: Investors also monitored rising interest rates, which tend to slow down economic growth by making it more expensive for people and companies to borrow money. Bond prices fell again Wednesday, sending yields higher. The yield on the 10-year Treasury note kept setting four-year highs as it rose to 3.03 percent from 3 percent.

Low interest rates have played an important role in the economic recovery of the last decade, and the yield on the 10-year note is a benchmark for many kinds of interest rates including mortgages. It’s been climbing because investors expect higher economic growth and inflation. While investors expect the Federal Reserve to raise interest rates two more times this year, growing numbers of them now expect it to raise rates a third time after that.

SKY TUSSLE: Media conglomerate Comcast made a new offer to buy British broadcaster Sky, this time for $30 billion. Sky had accepted a $16.5 billion offer from 21st Century Fox. British regulators are investigating whether Fox’s bid for Sky would give Rupert Murdoch and his family too much control over the country’s news media.

Comcast also had a stronger first quarter than analysts expected, although it continued to lose cable subscribers. Its stock rose 1.3 percent to $33.80. Sky gained 3.9 percent in London. Fox rose 1.6 percent to $36.59, while Disney, which plans to buy most of Fox’s overseas and entertainment assets, climbed 1.1 percent to $100.54.

OVERSEAS: Germany’s DAX fell 1 percent and Britain’s FTSE 100 and France’s CAC 40 both lost 0.6 percent. Japan’s benchmark Nikkei 225 shed 0.3 percent. Hong Kong’s Hang Seng lost 1.1 percent and the South Korean Kospi lost 0.6 percent.

CURRENCIES: The dollar rose to 109.33 yen from 108.67 yen. The euro fell to $1.2178 from $1.2237.

COMMODITIES: Benchmark U.S. crude oil rose 0.5 percent to $68.05 a barrel in New York. It’s up 33 percent over the last 12 months and trading at its highest price in more than three years. Brent crude, used to price international oils, fell 0.1 percent to $73.78 a barrel in London.

Wholesale gasoline fell 0.2 percent to $2.09 a gallon. Heating oil rose 0.4 percent to $2.14 a gallon. Natural gas rose 0.2 percent to $2.79 per 1,000 cubic feet.

Gold fell 0.7 percent to $1,323.70 an ounce and silver sank 1.1 percent to $16.52 an ounce.

____

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

Specialist Mario Picone works on the floor of the New York Stock Exchange, Wednesday, April 25, 2018. Stocks are opening lower, extending the market’s losses, after several companies reported weak results or warned of higher costs. (AP Photo/Richard Drew)

Trader Michael Milano works on the floor of the New York Stock Exchange, Wednesday, April 25, 2018. Stocks are opening lower, extending the market’s losses, after several companies reported weak results or warned of higher costs. (AP Photo/Richard Drew)

Trader Fred DeMarco works on the floor of the New York Stock Exchange, Wednesday, April 25, 2018. Stocks are opening lower, extending the market’s losses, after several companies reported weak results or warned of higher costs.(AP Photo/Richard Drew)

Trader Peter Tuchman works on the floor of the New York Stock Exchange, Wednesday, April 25, 2018. Stocks are opening lower, extending the market’s losses, after several companies reported weak results or warned of higher costs. (AP Photo/Richard Drew)

Specialist Thomas McArdle, left, works with traders at his post on the floor of the New York Stock Exchange, Wednesday, April 25, 2018. Stocks are opening lower, extending the market’s losses, after several companies reported weak results or warned of higher costs. (AP Photo/Richard Drew)

Trader Patrick Casey, left, and Michael Urkonis work on the floor of the New York Stock Exchange, Wednesday, April 25, 2018. Stocks are opening lower, extending the market’s losses, after several companies reported weak results or warned of higher costs. (AP Photo/Richard Drew)

Specialist Anthony Rinaldi works at his post on the floor of the New York Stock Exchange, Wednesday, April 25, 2018. Stocks are opening lower, extending the market’s losses, after several companies reported weak results or warned of higher costs. (AP Photo/Richard Drew)