Stocks slide further as banks and energy companies sink

Associated Press

NEW YORK

U.S. stock indexes edged lower for the second day in a row Wednesday as a sharp drop for banks and a rare loss for technology companies canceled out gains for drugmakers and consumer-focused companies.

Banks fell hard as executives from JPMorgan Chase and Bank of America said their trading businesses are having a rough second quarter. An eight-day winning streak for technology companies ended. Energy companies fell with oil prices. Investors picked consumer-focused companies, drugmakers and high-dividend utilities and household-goods companies.

“The stock market has been strong and all the while bond yields have dropped during the year,” signaling caution about the economy, said Brent Schutte, chief investment strategist for Northwestern Mutual Management. “In the next couple of months we’re going to solve which is right: the bond market or the stock market.”

Banks skidded a day earlier as bond yields dropped, which hurts banks by forcing interest rates on loans lower. Yields were little changed Wednesday, but financial firms fell again as investors worried that banks’ revenue from trading stocks, bonds and currencies is going to weaken in the second quarter.

At a financial industry conference in New York, Marianne Lake, JPMorgan Chase’s chief financial officer, said JPMorgan’s trading revenue is down about 15 percent this quarter because of a drop in fixed-income trading. She said that was because of low interest rates and remarkably low-market volatility.