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Friday, January 15, 2021

Winning streak for stocks fade as banks and miners slump

NEW YORK (AP) — U.S. stocks are slipping Thursday as a three-day winning streak fades. A decline in bond yields is sending bank stocks lower, while utilities and phone companies move higher. Mining and metals companies are also falling.

KEEPING SCORE: The Dow Jones industrial average slid 27 points, or 0.2 percent, to 17,978 as of 2:37 p.m. Eastern time. The Standard & Poor’s 500 index lost 4 points, or 0.2 percent, to 2,114. The Nasdaq composite declined 17 points, or 0.3 percent, to 4,957. Stocks are still up for the week, and over the last few days the S&P 500 has reached its highest levels since last July. Oil prices have done the same.

BANKS BONK: Bond prices rose, sending the yield on the 10-year U.S. Treasury note down to 1.68 percent from 1.70 percent a day earlier. Lower bond yields drive down interest rates on mortgages and other kinds of loans, making them less profitable for banks.

Mortgage agency Freddie Mac reported that mortgage rates fell this week after three weeks of increases. Freddie Mac said the average 30-year fixed-rate mortgage slipped to 3.60 percent from 3.66 percent last week. A year ago the rate was 4.04 percent.

Bank of America gave up 21 cents, or 1.5 percent, to $14.22 and Capital One fell $1.17, or 1.6 percent, to $70.93.

METAL MISERY: Mining companies also weakened. Copper and gold producer Freeport-McMoRan fell 71 cents, or 6.1 percent, to $10.87 and aluminum company Alcoa slid 12 cents, or 1.2 percent, to $9.77.

THE QUOTE: “There’s just a little lack of confidence in the market,” said Steve Quirk, executive vice president of trading for TD Ameritrade. “When you’re sitting near 11 month highs and there is uncertainty, people are going to be cautious.”

OIL: U.S. crude shed 67 cents, or 1.3 percent, to $50.56 a barrel in New York. Brent crude, the benchmark for international oil prices, fell 65 cents, or 1.2 percent, to $51.86 a barrel in London.

POWERING UP: Utilities and phone company stocks made modest gains as bond yields fell. Those stocks are seen as similar to bonds because they pay large dividends, so the bond yields make them more appealing by comparison. Ameren advanced 98 cents, or 2 percent, to $50.66 and Southern picked up 39 cents to $50.76. AT&T added 21 cents to $40.07.

HARD TIMES FOR HARDWARE: Home furnishings retailer Restoration Hardware cut its forecast for the year after it reported weak quarterly results. The company said it’s facing weaker sales of luxury goods. Its stock lost $7.10, or 19.7 percent, to $28.97.

LET’S JAM: J.M. Smucker climbed after it reported strong fourth-quarter sales of coffee products and pet foods. The company also gave an optimistic profit forecast for the current fiscal year. Its stock added $10.31, or 7.8 percent, to $143.02.

BAD FIT: Menswear chain Tailored Brands reported disappointing first-quarter results as its Men’s Wearhouse brand struggled. The stock tumbled $3.36, or 21.7 percent, to $12.17.

FLYING HIGH: Airlines traded higher as oil prices drop, potentially reducing fuel costs. American Airlines added 95 cents, or 2.9 percent, to $33.46 and United Continental rose 86 cents, or 1.9 percent, to $46.55.

METALS: Gold rose $10.40, or 0.8 percent, to $1,272.70 an ounce. Silver added 28 cents to $17.27 an ounce. Copper fell 2 cents to $2.04 a pound.

OTHER ENERGY TRADING: Wholesale gasoline was unchanged at $1.62 a gallon. Heating oil fell 2 cents to $1.55 a gallon. Natural gas jumped 15 cents to $2.62 per 1,000 cubic feet.

ECB WARNING: The president of the European Central Bank warned in a speech Thursday that the eurozone economy needs governments to make more reforms if it is to see higher growth. ECB head Mario Draghi noted the central bank could not heal the economy on its own.

OVERSEAS: Germany’s DAX fell 1.3 percent and Britain’s FTSE 100 slid 1.1 percent. France’s CAC 40 lost 1 percent. Tokyo’s Nikkei 225 shed 1 percent after the government reported that domestic and foreign private machinery orders fell in April from the month before, which suggests capital investment remains weak. South Korea’s KOSPI was 0.1 percent lower.

CURRENCIES: The dollar fell to 106.75 yen from 106.94 yen on Wednesday. The euro dropped to $1.1327 from $1.1397.

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