U.S. stocks fell broadly in early trading Friday, pulled down by sharp declines in utilities and consumer-focused companies. Energy stocks also fell as the price of crude oil turned lower following a rally the day before. News that North Korea had conducted a nuclear test also weighed on the market.
KEEPING SCORE: The Dow Jones industrial average fell 148 points, or 0.8 percent, to 18,331 as of 10:27 a.m. Eastern time. The Standard & Poor’s 500 index slid 20 points, or 0.9 percent, to 2,161. The Nasdaq composite index lost 44 points, or 0.8 percent, to 5,215.
NORTH KOREA ANGST: North Korea conducted a “higher level” nuclear test explosion on Friday. The nation boasted that it can now build an array of stronger, smaller and lighter nuclear weapons. It was the North’s fifth atomic test and the second in eight months. South Korea’s president called the detonation, which Seoul estimated was the North’s biggest-ever in explosive yield, an act of “fanatic recklessness.” Japan called North Korea an “outlaw nation.”
DRILLED: Several oil and gas production and drilling companies were down, giving back some of their gains from a rally Thursday. Diamond Offshore Drilling led the decliners in the S&P 500, losing 89 cents, or 5.1 percent, to $16.51. Williams Cos. slid $1.03, or 3.3 percent, to $30.12, while Transocean shed 34 cents, or 3.2 percent, to $10.14.
BOND YIELDS FALLOUT: A sharp rise in bond yields was weighing on utilities, real estate investment trusts and other high-dividend stocks. As yields rise, bonds become more competitive options for investors seeking income. Ventas fell $2.65, or 3.6 percent, to $70.33, while SL Green Realty slid $3.40, or 2.9 percent, to $113.19. Digital Realty Trust lost $3.02, or 3 percent, to $97.45. AT&T slid 64 cents, or 1.6 percent, to $40.55.
GOOD QUARTERS: Furniture and housewares retailer Restoration Hardware and fiber optic components supplier Finisar were up sharply on strong quarterly results. Restoration Hardware gained $3.11, or 8.8 percent, to $38.40. Finisar added $3.02, or 13 percent, to $26.25.
OVERSEAS: Disappointment over Thursday’s decision by the European Central Bank to keep monetary policy unchanged continued to weigh on European markets. Germany’s DAX fell 0.7 percent, while France’s CAC 40 lost 0.8 percent. Britain’s FTSE 100 was down 1 percent. In Asia, concerns over North Korea’s latest nuclear test hit stocks in South Korea. The Kospi index fell 1.3 percent. Japan’s benchmark Nikkei 225 rebounded from an initial drop to finish little changed, while Hong Kong’s Hang Seng rose 0.8 percent.
ENERGY: Oil prices were headed lower after rallying a day earlier. Benchmark U.S. crude fell $1.13, or 2.4 percent, to $46.50 a barrel. Brent crude, used to price international oils, was down $1.22, or 2.5 percent, at $48.74 a barrel.
BONDS: Bond prices fell. The yield on the 10-year Treasury rose to 1.67 percent from 1.60 percent late Thursday. The 10-year Treasury yield is at its highest level since last June.
CURRENCIES: The dollar rose to 102.71 yen from 102.49 on Thursday. The euro slipped to $1.1223 from $1.1257.
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