Tech companies, Citigroup tug U.S. stocks lower
New York • U.S. stocks were mostly lower Thursday as further declines in technology companies outweighed encouraging economic news. Citigroup fell 6 percent after the Federal Reserve denied the bank's plan to raise its dividend and buy back more stock. Most other major banks won approval to raise their dividends.
KEEPING SCORE: The Standard & Poor's 500 index fell two points, or 0.1 percent, to 1,850 as of 1:29 p.m. Eastern time. The Dow Jones industrial average edged up 14 points, or 0.09 percent to 16,283 and the tech-heavy Nasdaq composite fell 16 points, or 0.4 percent, to 4,156.
ENERGIZED: Energy stocks were among the biggest gainers. The industry got a lift from a 1 percent rise in crude oil prices to over $100 a barrel. Exxon Mobil rose $1.24, or 1.3 percent, $95.94, making it the best performer in the Dow.
REJECTED: Citigroup dropped $2.76 to $47.40 after the Fed rejected the bank's plans to return more money to investors. It was the second time in three years that Citi's plans for rewarding its shareholders were denied following an annual check-up, or "stress test." Citi brought in CEO Michael Corbat in 2012, the last time the Fed rejected the company's capital plan, with the mandate of speeding up the bank's turnaround.
THE QUOTE: "While there's going to be some winners and losers, these 'stress test' results will be an overall positive for the banks because it removes some of uncertainty in the sector," said Andres Garcia-Amaya, a global market strategist for J.P. Morgan Funds.
OTHER BANKS: Citigroup was one of only five banks who had their capital plan rejected. Banks such as Wells Fargo rose after the Fed approved their plans to increase dividends and buy back more of their own shares.
UP WITH THE KING: King Entertainment, producer of the "Candy Crush Saga" video game, edged up in afternoon trading, a day after its poor market debut. The stock rose 24 cents, or 1.3 percent, to $19.24. It plunged 16 percent the day before.
NO HIGH SCORE: GameStop fell $2.42, or 6 percent, to $36.48. The video game retail chain reported higher fourth-quarter earnings, thanks to the recent debut of Microsoft's Xbox One and Sony's PlayStation 4, but its earnings missed estimates. The company also announced it would close 2 percent of its stores.
TECH STRUGGLES: A sell-off in technology stocks continued for a second day Thursday. Google fell $11.90, or 1 percent, to $1,120.01. Electric car company Tesla Motors was down $4.85, or 2 percent, to $208.16.
BETTER ECONOMY: The government estimated that the U.S. economy expanded at a 2.6 percent pace between October and December, slightly better than previously thought as consumer spending rose at the fastest pace in three years. In a separate report, the government also said the number of people seeking U.S. unemployment benefits fell 10,000 last week to 311,000, the lowest since late November. Both reports were better than economists were expecting.
OTHER MARKETS: Bond prices rose. The yield on the 10-year Treasury note rose to 2.68 percent from 2.69 percent late Wednesday. The price of crude oil rose $1.09, or 1.1 percent, to $101.35 a barrel.