US stocks drift lower
NEW YORK, USA — US stocks fell slightly in afternoon trading yesterday, a day after major indexes reached their latest record highs. Hillshire Brands jumped as a bidding war for the company heated up while Krispy Kreme Doughnuts plunged after issuing a disappointing forecast.
The Dow Jones industrial average dropped 18 points, or 0.1 per cent, to 16,725 as of 2:50 p.m. Eastern time. The Standard & Poor’s 500 index lost a point, or 0.1 per cent, to 1,924 and the Nasdaq composite fell six points, or 0.2 per cent, to 4,231. On Monday, both the Dow and S&P 500 hit record highs for the second straight trading day.
Deli meat and hotdog maker Hillshire Brands rose US$5.15, or 10 per cent, to US$58.71. The company said it will hold separate talks with Tyson Foods and Pilgrim’s Pride, which are both trying to buy Hillshire. Pilgrim’s Pride late Monday raised its bid for the company to US$55 a share, US$5 more than what Tyson Foods offered last week. Hillshire was trading several dollars above Pilgrim’s bid, a sign that investors believe both Pilgrim’s Pride and Tyson are willing to offer much more for Hillshire.
Krispy Kreme slumped after the doughnut chain cut its earnings forecast for this year, citing higher costs and fewer sales than previously estimated. The company’s stock fell US$2.75, or 15 per cent, to US$16.25.
Orders to US factories rose for a third consecutive month in April, new evidence that manufacturing is regaining momentum after a harsh winter. Factory orders rose 0.7 per cent in April, better than the 0.5 per cent rise that economists expected.
The factory orders data was the third manufacturing report in two days. On Monday, reports on US and Chinese manufacturing activity came in above expectations, which helped push stocks higher.
“The economic data here continues to get incrementally better,” said Quincy Krosby, a market strategist for Prudential Financial. “But Friday’s jobs report is the big number this week.
Investors will get the May US jobs report Friday, and the European Central Bank will announce its latest interest rate policy decision on Thursday.
Economists expect that companies hired 220,000 workers last month, and that the unemployment rate remained steady at 6.3 per cent, according to FactSet.
In the market for US government bonds, the yield on the 10-year Treasury rose to 2.59 per cent from 2.53 per cent late Monday.