US stock indexes edged lower for the second day in a row as a sharp drop for banks and a rare loss for technology companies cancelled out gains for drug makers 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, drug makers, and high-dividend utilities and household goods companies.
The New York Stock Exchange was evenly split between gainers and losers.
"The stock market has been strong and all the while bond yields have dropped during the year," signalling 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."
The Standard & Poor's 500 index lost 1.11 points, or less than 0.1%, to 2,411.80. The Dow Jones industrial average dropped 20.82 points, or 0.1%, to 21,008.65. The Nasdaq composite fell 4.67 points, or 0.1%, to 6,198.52. The Russell 2000 index of small-company stocks slipped 0.99 points, or 0.1%, to 1,370.21.
Banks skidded a day earlier as bond yields dropped, which hurts banks by forcing interest rates on loans lower. Yields were little changed, 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% this quarter because of a drop in fixed-income trading. She said that was because of low interest rates and remarkably low market volatility.
"There is not a lot to trade around," she said. "People have cash but no conviction."
At a different industry event on Wednesday, Bank of America CEO Brian Moynihan said second-quarter trading revenue will fall 10% compared to a year ago.
The banking industry had an outstanding first quarter, and trading was a key reason. JPMorgan Chase fell 1.75 US dollars, or 2.1%, to 82.15 dollars and Bank of America lost 43 cents, or 1.9%, to 22.41 dollars. Capital One slumped 1.36 dollars, or 1.7%, to 76.92 dollars and Goldman Sachs, which saw its vaunted trading business hit a speed bump in the first quarter, gave up 7.16 dollars, or 3.3%, to 211.26 dollars.
Bond prices were little changed. The yield on the 10-year Treasury note remained at 2.21%.
Technology companies turned lower. The tech sector has reached its highest levels since the dot-com boom and companies like Apple, Google parent Alphabet and Facebook have done far better than the rest of the market in 2017. Apple and Facebook are up 32% this year, and Alphabet is up 25%. All three slid on Wednesday.
Pfizer rose 52 cents, or 1.6%, to 32.65 dollars and Irish drug maker Perrigo climbed 4,93 dollars, or 7.3%, to 72.85 dollars after its first-quarter report was better than expected. Health care products maker Johnson & Johnson advanced 1.14 dollars to 128.25 dollars.
Benchmark US crude lost 1.34 dollars, or 2.7%, to 48.32 dollars a barrel in New York. Brent crude, the standard for international oil prices, fell 1.53 dollars, or 3%, to 50.31 dollars a barrel in London. Energy stocks continued to decline. Exxon Mobil sank 60 cents to 80.50 dollars and Hess declined 78 cents, or 1.7%, to 45.89 dollars.