Stocks close modestly lower as oil slumps

A sharp sell-off in energy companies pulled U.S. stock indexes modestly lower Wednesday, wiping out small gains from the day before.

Another slide in crude oil prices weighed on the energy sector. Banking, healthcare and technology companies also declined, while consumer-focused stocks and phone companies posted gains.

Investors mostly focused on company earnings from retailers, restaurant chains and other companies.

“We’re still down year-over-year for the quarter, but there’s a growing conviction that the headwinds from the energy bust and strong dollar are increasingly fading,” said David Lefkowitz, senior equity strategist at UBS Wealth Management Americas.

The Dow Jones industrial average fell 37.39 points, or 0.2%, to 18,495.66. The Standard & Poor’s 500 index fell 6.25 points, or 0.3%, to 2,175.49. The Nasdaq composite index fell 20.90 points, or 0.4%, to 5,204.58.

In the absence of major economic news, investors have been monitoring company earnings for clues about how the second half of the year is shaping up for corporate America.

A strong jobs report last Friday boosted investors’ confidence in the U.S. economy. Traders are looking ahead to Friday, when the government delivers its latest monthly retail sales figures.

Most companies have already delivered their quarterly reports, and earnings and revenues have been relatively good. Some 90% of the companies in the S&P 500 index have already reported second-quarter results, and roughly 65% posted earnings that beat Wall Street’s expectations, according to S&P Global Market Intelligence.

Even so, earnings overall are expected to be down 2.1%, dragged down by the energy sector, which has been struggling with a steep drop in oil prices.

A report showing a bigger-than-expected increase in U.S. oil stockpiles last week weighed on the price of crude, reversing an early gain.

Benchmark U.S. crude fell $1.06, or 2.5%, to $41.71 a barrel in New York. Brent crude, used to price international oils, slid 93 cents, or 2.1%, to $44.05 a barrel in London.

Several companies reported disappointing quarterly results or outlooks Wednesday.

SunPower tumbled 30.2% to $10.31 after the solar products and service company said its power plant business is struggling amid growing competition and project delays.

Michael Kors slid 2.8% to $48.71 after the clothing company forecast weaker sales for the current quarter and lowered its outlook for sales at established stores.

Perrigo sank 9.6% to $86 after the pharmaceuticals company cut its guidance for the year, citing growing competition and falling prescription drug prices.

Investors bid up shares in several companies that reported strong earnings. Online business review portal Yelp jumped 12.8% to $36.83, and clothing company Ralph Lauren surged 8.5% to $103.14.

“The earnings beats that we’re getting are, to a large extent, being driven by better revenue performance,” Lefkowitz said.

Markets overseas were mixed.

Germany’s DAX and France’s CAC 40 each sank 0.4%. Britain’s FTSE 100 rose 0.2%.

Japan’s Nikkei 225 slipped 0.2% despite a report showing private-sector machinery orders rebounded in June from May. Hong Kong’s Hang Seng edged up 0.1%, while Australia’s S&P ASX 200 fell 0.2%. South Korea’s Kospi climbed less than 0.1%. Stocks in Taiwan and Singapore rose, but markets in China, Indonesia and New Zealand declined.

In other energy trading, wholesale gasoline fell 4 cents to $1.30 a gallon, heating oil fell a penny to $1.32 a gallon and natural gas fell 5 cents, or 2.1%, to $2.56 per 1,000 cubic feet.

Among metals, the price of gold rose $5.20, or 0.4%, to $1,351.90 an ounce. Silver rose 32 cents, or 1.6%, to $20.17 an ounce. Copper rose 2 cents, or 1%, to $2.17 a pound.

Bond prices rose. The yield on the 10-year Treasury note fell to 1.51% from 1.55%. The dollar weakened to 101.29 yen from 101.90 yen, and the euro strengthened to $1.1175 from $1.1107.

UPDATES:

3 p.m.: This article was updated with the close of markets and additional details.

This article was originally published at 7:50 a.m.