After hitting a record high the day before, stocks moved lower midday trading Thursday as investors reacted to disappointing results from Best Buy, Citigroup and CSX, a railroad company.
KEEPING SCORE: The Standard & Poor’s 500 index was down five points, or 0.3 percent, at 1,844 as of 12:35 p.m. Eastern. The Dow Jones industrial average lost 80 points, or 0.5 percent, to 16,401. The Nasdaq composite lost two points, or 0.1 percent, to 4,213.
BEST BUY: The electronics store chain plunged $10.20, or 27 percent, to $27.29, by far the biggest drop in the S&P 500 index. Best Buy said its sales fell 0.8 percent for the nine weeks ended Jan. 4, while analysts had expected growth. The holiday shopping period is the most important time of the year for retailers, where chains like Best Buy can make up to 40 percent of their annual sales. Best Buy was one of the biggest gainers in the S&P 500 in 2013, up 236 percent.
BANKS: Investors got another dose of earnings from the banking industry. Citigroup’s results fell short of analysts’ expectations. The company cited a slowdown in its bond and mortgage businesses. The stock dropped $2.32, or 4 percent, to $52.67. Goldman Sachs also reported a drop in fourth-quarter profit due to problems in its mortgages and bond trading division. However, Goldman’s earnings beat analysts’ expectations and the stock took less of a hit. Goldman fell $3.78, or 2 percent, to $175.
TRANSPORTATION: The Dow Jones Transportation Average, also known as the Dow Transports, was down nearly 1 percent. The railroad company CSX warned investors Thursday that it might be difficult to reach its own profit targets over the next two years because of ongoing weak demand for coal. The news pushed CSX down $2.08, or 7 percent, to $27.15. Other railroad stocks including Union Pacific and Norfolk Southern were down as well. Investors use the Dow Transports as a bet on the overall economy because transportation companies move goods all over the globe.
EARNINGS, EARNINGS, EARNINGS: Quincy Krosby, a market strategist with Prudential Financial, said it will be tough for stocks to move higher in the short term until more companies report their results. Dozens of members of the S&P 500 index report next week, including Microsoft, IBM, Delta Air Lines and McDonald’s. “We need the economic data and corporate earnings be strong enough to support these valuations,” Krosby said.
JOBS: The number of Americans seeking unemployment benefits fell 2,000 last week to a seasonally adjusted 326,000, a sign that layoffs are weighing less on the job market and economic growth. The less volatile four-week average dropped 13,500 to 335,000.
PIZZA PARTY: CEC Entertainment, the parent company of the Chuck E. Cheese pizza parlor chain, was up 13 percent to $54.50. CEC agreed to be bought by the private equity firm Apollo Global Management for $950 million.
BONDS: Prices on U.S. government bonds rose slightly. The yield on the 10-year Treasury note, a benchmark for many kinds of loans including home mortgages, fell to 2.85 percent from 2.89 percent the day before.