US stocks mostly fall as smaller companies continue to fall.
US stocks mostly fall as smaller companies continue to fall.
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The retailers sank on Tuesday after Amazon He said he will increase hourly wages for US employees. UU and that smaller companies will continue to stumble. Several large industrial companies increased, bringing the Dow Jones Industrial Average to a record level.
Amazon, one of the largest private employers in the United States, said it will raise the minimum wage for its American workers to $ 15 an hour in November. Amazon also said it will advocate for an increase in the federal minimum wage, which has been $ 7.25 per hour since July 2009. Its shares fell, but other retailers suffered higher losses.
"The question is, do other companies have to follow their example?" said Quincy Krosby, chief market strategist at Prudential Financial. "This is the argument that what is good for Main Street is not necessarily good for Wall Street."
The bad news for the retailers did not end there. Stitch Fix, an online clothing company, plunged 35.2 percent to $ 28.94. Stitch Fix had almost tripled since its IPO in November.
Pepsi fell after it said that the strong dollar will take a larger portion of its annual profits. General engines and Ford both fell after they reported their sales.
The S & P 500 index fell 1.16 points to 2,923.43. The Dow added 122.73 points, or 0.5 percent, to 26,773.94. The biggest gains came from the industrial companies Boeing, 3M and Caterpillar.
The Nasdaq compound lost 37.75 points, or 0.5 percent, to 7,999.55. Three shares fell for every two that rose on the New York Stock Exchange.
Amazon lost 1.6 percent to $ 1,971.31 while Nike lost 2 percent to $ 82.77 and Gap sank 4.9 percent to $ 27.31. The smaller companies focused on the consumer fared even worse. Crocs fell 6.8 percent to $ 19.59 and Guess slipped 6.7 percent to $ 20.69.
The Russell 2000 index of shares of smaller companies fell 16.95 points, or 1 percent, to 1,656.04, its lowest close since July 30. Earlier this year, investors bought smaller companies as tensions with trading partners increased. Smaller companies tend to be less exposed to commercial conflicts, since they do more business in the United States than larger companies.
Investors are not so worried about commercial tensions recently, so they are shifting money from smaller companies to large multinationals. In the last three months, the S & P 500 has risen by 7.2 percent and the Russell is essentially flat.
Krosby said rising oil and gas prices are also a problem for retailers because they could make consumers feel like they have less money to spend during the holiday shopping season.
The automakers fell after their sales updates. GM dropped 2.6 percent to $ 33.30 and Ford fell 1.3 percent to $ 9.20, but Toyota added 0.7 percent to $ 125.71. AutoZone auto parts retailers dropped 1 percent to $ 762.82.
Car manufacturers rose on Monday as the trade agreement with Canada appeared to reduce the chances that the industry would be hurt by tariffs on imported cars. The pact offers protection to Canada if the United States imposes tariffs.
Pepsi fell 1.8 percent to $ 108.72 after it said the stronger dollar will have a greater effect on its earnings this year. The company now expects a profit of around $ 5.65 per share in 2018, down from a previous estimate of $ 5.70 per share.
Airlines fell after Delta's projections for the third quarter disappointed Wall Street, and the airline said it lost $ 30 million due to Hurricane Florence. Delta dropped 3.4 percent to $ 54.69 while American dropped 2.8 percent to $ 38.50.
Italy's leaders refused to bow to the new spending plans that have worried investors, pushing the eurozone's third largest economy into a collision course with its EU partners. Deputy Prime Minister Luigi Di Maio said on Tuesday that the government will not change its plan to increase its deficit to 2.4 percent of GDP.
Italy's FTSE MIB fell 0.2 percent for its fifth consecutive loss, and prices of Italian government bonds continued to fall, a sign that investors are worried about the country's debts. The DAX of Germany lost 0.4 percent and the CAC 40 in France fell by 0.7 percent. Britain's FTSE 100 fell 0.3 percent.
Separately, credit rating agency Moody's warned that Europe remains highly vulnerable to another economic downturn despite all its firefighting efforts in recent years.
Oil prices fell slightly after reaching four-year highs on Monday. US benchmark crude fell 0.1 percent to $ 75.23 in New York. Brent crude, used to quote international oils, fell 0.2 percent to $ 84.80 per barrel in London.
Wholesale gasoline was changed slightly to $ 2.13 per gallon and heating oil remained at $ 2.41 per gallon. Natural gas rose 2.3 percent to $ 3.17 per 1,000 cubic feet.
Gold rose 1.3 percent to $ 1.207 per ounce and silver rose 1.3 percent to $ 14.69 per ounce. Copper gained 0.7 percent at $ 2.81 a pound.
The dollar fell to 113.69 yen from 113.99 yen. The euro fell to $ 1.1545 from $ 1.1575.
The prices of the bonds rose more. The yield on the 10-year Treasury note fell to 3.06 percent from 3.08 percent.
Hong Kong's Hang Seng fell 2.4 percent after it reopened after a national holiday. Kospi of South Korea lost 1.3 percent and the Nikkei 225 benchmark index in Tokyo added 0.1 percent.
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You can contact the AP Markets writer, Marley Jay, at http://twitter.com/MarleyJayAP Her work can be found at https://apnews.com/search/marley%20jay
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