NEW YORK, N.Y. – U.S. stocks skidded Friday in a wave of selling that wiped out most of the market’s gains from earlier this week. A drop in oil prices took energy companies sharply lower. Investors were also troubled by a poll showing Britain may be more likely to leave the European Union.
Oil prices fell by the largest amount in two months, and banks slumped as bond yields fell for the second consecutive day, pulling interest rates lower. Machinery, technology and consumer stocks also lost ground. It was the market’s biggest loss in more than three weeks.
Eric Wiegand, senior portfolio manager for U.S. Bank’s Private Client Reserve, said investors are guessing at the outcome of the British referendum and the Federal Reserve’s meeting next week, as well as the impending U.S. presidential election.
“There’s just not a good way to handicap the outcome just yet,” he said.
The Dow Jones industrial average lost 119.85 points, or 0.7 per cent, to 17,865.34. The Standard & Poor’s 500 index fell 19.41 points, or 0.9 per cent, to 2,096.07. The Nasdaq composite shed 64.07 points, or 1.3 per cent, to 4,894.55.
U.S. crude shed $1.49, or 2.9 per cent, to $49.07 a barrel in New York. Brent crude, the benchmark for international oil prices, fell $1.28, or 2.5 per cent, to $50.56 a barrel in London. Oil prices had reached 11-month highs in the last few days.
ConocoPhillips gave up $2.06, or 4.4 per cent, to $44.51 and oilfield services company Schlumberger shed $1.43, or 1.8 per cent, to $78.53.
As they did Thursday, banks fell along with bond yields. Lower bond yields drive down interest rates on mortgages and other kinds of loans, and that makes them less profitable for banks. Citigroup sank $1.11, or 2.5 per cent, to $43.90 and JPMorgan Chase lost 91 cents, or 1.4 per cent, to $63.84.
Bond prices rose further and the yield on the 10-year U.S. Treasury note sank to 1.64 per cent from 1.69 per cent.
The drop in bond yields sent phone companies higher, as those stocks’ high dividend yields are comparable to bonds. Verizon Communications rose 72 cents, or 1.4 per cent, to $52.67.
Stocks started the week with three days of gains and reached their highest levels in months, but finished back where they started. For the week the Dow was a bit higher, the Nasdaq lower, and the S&P 500 essentially unchanged.
That showed investors are cautiously optimistic, as the U.S. economy is still growing and corporate profits are expected to pick up later in the year. But they’re also very sensitive to uncertainty or potential trouble, whether it’s from slower global growth or Fed policy or Britain’s status in the European Union.
A poll in London’s The Independent showed that 55 per cent of British citizens want to leave the European Union. Some investors fear Britain’s economy will be damaged if it votes to leave the EU, and that other nations might follow Britain’s lead.
Consumer stocks also fell, with some of the sharpest losses going to big names. Netflix slid $3.34, or 3.4 per cent, to $93.75 and Amazon declined $9.74, or 1.3 per cent, to $717.91.
Retailer Urban Outfitters slumped after it said sales at established stores are continuing to fall in the second quarter so far. Those sales are considered an important measure of retailer performance. The company’s stock slid $1.61, or 5.8 per cent, to $26.32.
Westlake Chemical Corp. said it will buy Axiall for $33 per share, or $2.33 billion. The agreement ends a takeover dispute that had lasted all year, and it will create one of the largest producers of chlorine, plastics and other chemicals. Axiall jumped $6.75, or 26.2 per cent, to $32.56 and Westlake rose $1.34, or 3 per cent, to $46.40.
Tax preparer H&R Block posted a bigger profit and more revenue than analysts expected, sending its stock up $2.69, or 12.5 per cent, to $24.23. That was by far the largest gain among S&P 500 stocks.
Global Blood Therapeutics climbed after it reported positive results from an early clinical study of its most advanced drug, a potential treatment for sickle cell disease. The company’s stock gained $2, or 9 per cent, to $24.15.
Mattress Firm, the bedding maker behind Serta, Sealy, and other brands, reported a bigger loss and less revenue than expected and cut its estimates for the year. Its stock dropped $4.18, or 12.4 per cent, to $29.40.
Gold rose $3.20 to $1,275.90 an ounce. Silver gained 6 cents to $17.33 an ounce. Copper fell 1 cent to $2.03 a pound.
In other energy trading, wholesale gasoline dropped 6 cents to $1.56 a gallon. Heating oil fell 4 cents to $1.52 a gallon. Natural gas lost 6 cents to $2.56 per 1,000 cubic feet.
Germany’s DAX fell 2.5 per cent and the CAC 40 in France slumped 2.2 per cent. Britain’s FTSE 100 lost 1.9 per cent. Japan’s benchmark Nikkei 225 index lost 0.4 per cent while South Korea’s Kospi dipped 0.3 per cent. Hong Kong’s Hang Seng shed 1.2 per cent.
The dollar declined to 106.79 yen from 106.83 yen. The euro fell to $1.1259 from $1.1331.
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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP . His work can be found at http://bigstory.ap.org/journalist/marley-jay
