Stocks veer lower, led by drops in tech companies and banks
NEW YORK (AP) — Stocks are veering lower in midday trading on Wall Street Wednesday, led by drops in technology companies and banks.
Energy companies were also lower as the price of crude oil continued to decline. Investors shifted money into safer holdings after more than a week of aggressive buying.
Consumer staples and utilities were among the biggest gainers. Coca-Cola and Mondelez rose. Johnson & Johnson Health led health care stocks higher.
The weak start follows a broad drop in stocks the day before after five days of gains. The shift in momentum came after a rally last week set off by the Federal Reserve's signal that it is willing to cut interest rates to help stabilize the economy if the U.S. trade war with China starts to crimp growth. Investors are increasingly worried that the dispute will drag on much longer than expected.
Technology companies lagged the market. The sector has been under the most pressure from swings in sentiment over the trade dispute between the U.S. and China. Cisco fell 1.6% and Micron fell 5.5%.
Investors will likely have to deal with more volatility ahead of an economic summit later this month. President Donald Trump has said he plans to meet with Chinese President Xi Jinping at the Group of 20 summit in Osaka, Japan.
KEEPING SCORE: The S&P 500 index fell 0.3% as of noon Eastern Time. The Dow Jones Industrial Average fell 74 points, or 0.3%, to 25,970. The Nasdaq composite fell 0.5%.
ANALYST'S TAKE: The slide in the market reflects heightened investor uncertainty over trade and its impact on the economy.
President Donald Trump's decision to threaten an expansion of the trade war to Mexico made a jittery market even more uneasy. Those potential tariffs have been indefinitely postponed, but the move left its mark.
"This was a game changer, the idea that the administration would use tariffs to further policy that is not related to trade is concerning," said Kristina Hooper, chief global market strategist at Invesco.
Investors are now in the midst of a "waiting game" ahead of additional economic data later this week and next week's Federal Reserve meeting. The market will likely lack much direction until then, she said.
POOR PLAY: Dave & Buster's Entertainment plunged 21.5% after the company gave investors a dismal first quarter financial report and slashed its revenue forecast for the year.
The company behind the restaurant and arcade chain Dave & Buster's missed Wall Street's profit and revenue forecasts. Sales at established locations fell far short of expectations. Food and beverage sales did especially poorly.
DISCOUNT DATA: Medidata Solutions dipped 3.7% after the company announced a deal to be acquired at a discount price to French software company Dassault Systems.
The deal values Medidata at $92.25 per share, less than its closing price of $94.75 on Tuesday.
Medidata provides cloud-based services and software to help medical and pharmaceutical companies manage data and track clinical trials. Its clients include top drugmakers. It has 16 offices across seven countries.