NEW YORK – Investors are making a small move back to traditionally safe assets Friday afternoon after the rally of the last few weeks. Bonds are rising, as are real estate, telecommunication and household goods retail companies. Bond yields are moving lower and banks are falling. The Dow Jones industrial average, which closed at a record high a day ago, is down slightly.
KEEPING SCORE: The Dow lost 36 points, or 0.2 percent, to 19,154 as of 2:05 p.m. Eastern time as Goldman Sachs, which closed at a nine-year high Thursday, skidded. The Standard & Poor’s 500 index lost 2 points, or 0.1 percent, to 2,189. The Nasdaq composite was unchanged at 5,251. On the New York Stock Exchange, more stocks rose than fell.
BONDS: Bond prices, which have been falling sharply since the presidential election, rose in midday trading. The yield on the 10-year Treasury note fell to 2.38 percent from 2.45 percent. That helped utility and real estate companies and consumer goods makers, which are often compared to bonds because of their big dividend payments. When bond yields fall, those stocks become more appealing to investors seeking income. Public Storage rose $1.99, or 1 percent, to $209.85 and Exelon rose 74 cents, or 2.3 percent, to $32.91. PepsiCo climbed 85 cents to $99.88.
BANKS: The drop in bond yields also affected banks because yields are linked to interest rates. Lower interest rates mean banks can’t make as much money from lending. Charles Schwab declined 88 cents, or 2.2 percent, to $38.72, Goldman Sachs fell $3.97, or 1.8 percent, to $222.66 and Citigroup gave up $1.03, or 1.8 percent, to $56.24.
The S&P 500 index of financial stocks is at its highest level since 2008, and it’s up 13 percent since the presidential election.
U.S. JOBS DATA: U.S. employers added 178,000 jobs in November as hiring remained steady. However, fewer people looked for work and hourly wages slipped. The results cemented market expectations that the Federal Reserve will raise interest rates later this month. A very weak jobs report would have been the last thing that might have stopped the Fed from raising rates.
BOWING OUT: Starbucks shares slid $1.10, or 1.9 percent, to $57.41 after the company said Howard Schultz will step down as CEO in April. He will remain chairman of the company, and Starbucks said he will focus on new ideas like high-end shops. President and Chief Operating Officer Kevin Johnson will become CEO. Schultz gave up the CEO title in 2000, and investors feel Starbucks struggled until he became CEO again in 2008.
MISFIRE: Firearms maker Smith & Wesson gave up $2.68, or 11.2 percent, to $21.30 after its quarterly guidance disappointed investors.
RETAIL: Discount retailer Five Below jumped after it said it’s off to a strong start this holiday season. That helped the stock rebound from losses over the last week. It picked up $5.01, or 12.6 percent, to $44.89. Also rising was Ascena Retail, as its Ann Taylor and Dressbarn business did better than analysts expected. The stock gained $1.23, or 21 percent, to $7.06, but it’s still down almost 30 percent this year.
Gap lost 66 cents, or 2.7 percent, to $24.39 after it reported weak sales in November. That included sluggish results for Old Navy, which has been its best-performing business in recent years but has struggled lately.
OFF DAY: Human resources software company Workday gave a weak forecast. CEO Aneel Bhusri said some customers have recently delayed completing large deals, partly because of “global uncertainties such as Brexit, the U.S. presidential election, and pending elections in other G8 countries.” Workday’s stock tumbled $8.51, or 10.4 percent, to $73.09.
ENERGY: Benchmark U.S. crude added 49 cents, or 1 percent, to $51.55 a barrel in New York. Brent crude, the standard for pricing international oils, picked up 30 cents to $54.24 a barrel in London. Oil prices jumped 13 percent over the last two days after OPEC countries agreed to trim production.
METALS: Gold rose $8.40 to $1,177.80 an ounce. Silver jumped 33 cents, or 2 percent, to $16.83 an ounce. Copper lost 2 cents to $2.63 a pound.
CURRENCIES: The dollar fell to 113.70 yen from 114.04 yen. The euro rose to $1.0660 from $1.0645.
OVERSEAS: The CAC-40 in France fell 0.7 percent and the FTSE 100 index in Britain finished 0.3 percent lower. Germany’s DAX fell 0.2 percent. The Nikkei 225 index in Japan shed 0.5 percent and South Korea’s Kospi lost 0.7 percent. Hong Kong’s Hang Seng retreated 1.4 percent.
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