Stocks wilt af­ter FBI in­quiry into new Clin­ton emails

WALL STREET WEEKLY ROUNDUP

Kuwait Times - - BUSINESS -

A mid­day ad­vance on the stock mar­ket wilted in af­ter­noon trad­ing Fri­day af­ter the FBI no­ti­fied Con­gress that it will in­ves­ti­gate new emails linked to Demo­cratic pres­i­den­tial can­di­date Hil­lary Clin­ton. The mar­ket had started out on a strong note af­ter the gov­ern­ment re­ported that the economy broke out of a slump in the third quar­ter and grew at the fastest pace in two years.

The early climb was led by in­dus­trial, en­ergy and tech­nol­ogy com­pa­nies, which would stand to ben­e­fit most from a pickup in economy, but the gains dis­ap­peared af­ter the FBI made its an­nounce­ment at about 1 p.m. East­ern. Clin­ton has led in re­cent polls, and the sur­prise de­vel­op­ment added new un­cer­tainty just a week and a half be­fore the pres­i­den­tial election.

“I think the bet­ting has to be that there’s noth­ing too damn­ing, but we don’t know,” said Brad McMil­lan, chief in­vest­ment of­fi­cer for Com­mon­wealth Fi­nan­cial Net­work.

The Dow Jones in­dus­trial av­er­age closed down 8.49 points, less than 0.1 per­cent, at 18,161.19. The in­dex was 80 points higher shortly be­fore the new in­quiry was dis­closed, then went down as much as 74 points in the min­utes that fol­lowed. The Stan­dard & Poor’s 500 in­dex dipped 6.63 points, or 0.3 per­cent, to 2,126.41. The Nas­daq com­pos­ite slid 25.87 points, or 0.5 per­cent, to 5,190.10.

Health care com­pa­nies took the big­gest losses by far. Pre­scrip­tion drug dis­trib­u­tor McKes­son plunged to a three-year low af­ter its rev­enue fell about $1.5 bil­lion short of es­ti­mates. The com­pany slashed its an­nual out- look be­cause of weaker drug prices, and in­vestors wor­ried that McKes­son and its ri­vals will com­pete by mak­ing big­ger cuts in prices.

McKes­son tum­bled $36.39, or 22.7 per­cent, to $124.11 and com­peti­tor AmerisourceBer­gen lost $10.36, or 13 per­cent, to $69.14 while Car­di­nal Health shed $7.30, or 9.8 per­cent, to $67.50.

Drug­mak­ers were pum­meled on weak earn­ings. Am­gen, the world’s largest biotech drug com­pany, re­ported solid re­sults for the third quar­ter and raised its guid­ance. How­ever the com­pany also dis­closed flat sales of the anti-in­flam­ma­tory med­i­ca­tion En­brel, its top-sell­ing drug. En­brel will soon face more com­pe­ti­tion, which could hurt sales.

Am­gen gave up $15.39, or 9.6 per­cent, to $145.18. It was the stock’s worst one-day loss since Oc­to­ber 2000. Drug­maker Ab­b­Vie dis­closed weak sales and lost $3.86, or 6.3 per­cent, to $57.60.

Health care stocks are the worst per­form­ing part of the mar­ket this year. They’re down 6 per­cent while the S&P 500 is up 4 per­cent. Their per­for­mance com­pared to the rest of the mar­ket has got­ten even worse over the last few months. Ear­lier, stocks rose af­ter the economy grew faster than ex­pected dur­ing the third quar­ter. The Com­merce De­part­ment said ex­ports grew and more busi­nesses re­stocked their shelves. In to­tal, gross do­mes­tic prod­uct grew 2.9 per­cent, which was bet­ter than econ­o­mists ex­pected. Growth had slowed down late last year, caus­ing worry among in­vestors.

McMil­lan said he thinks the economy should keep grow­ing at a sim­i­lar pace for the next few quar­ters.

“We’re al­ready see­ing busi­ness and con­sumer con­fi­dence come back,” he said. Gen­eral Elec­tric and oil and gas drilling ser­vices com­pany Baker Hughes rose as they dis­cussed a pos­si­ble deal. GE said the dis­cus­sions con­cern a part­ner­ship and that it doesn’t in­tend to buy Baker Hughes out­right. Baker Hughes tried to merge with com­peti­tor Hal­libur­ton two years ago, but the com­pa­nies walked away from the com­bi­na­tion af­ter the fed­eral gov­ern­ment sued to block it. GE added 59 cents, or 2.1 per­cent, to $29.22 and Baker Hughes gained $4.57, or 8.4 per­cent, to $59.12. Other in­dus­trial stocks in­clud­ing United Tech­nolo­gies, which makes prod­ucts in­clud­ing jet en­gines and el­e­va­tors, and man­u­fac­turer Honey­well also traded higher. Ama­zon sank af­ter its profit came up short of an­a­lysts’ es­ti­mates. The com­pany also re­leased a weak out­look. The stock is trad­ing at all-time highs and has surged more than 30 per­cent over the last 12 months. It fell $42.04, or 5.1 per­cent, to $776.32. AB InBev cut its an­nual rev­enue fore­cast fol­low­ing weak re­sults from its busi­ness in Brazil. The world’s largest beer maker fell $4.62, or 3.8 per­cent, to $116.84. US crude fell $1.02, or 2.1 per­cent, to $48.70 a bar­rel in New York. That was its low­est price this month. Brent crude, the in­ter­na­tional stan­dard, lost 76 cents, or 1.5 per­cent, to $49.71 a bar­rel in Lon­don.

Bond prices edged higher. The yield on the 10-year Trea­sury note fell to 1.84 per­cent from 1.85 per­cent. The dol­lar slipped to 104.78 yen from 105.29 yen. The euro rose to $1.0982 from $1.0898.

Met­als turned higher. The price of gold picked up $7.30 to $1,276.80 an ounce. Sil­ver rose 16 cents to $17.80 an ounce. Cop­per added 3 cents to $2.19 a pound. In other en­ergy trad­ing, whole­sale gaso­line lost 2 cents to $1.47 a gal­lon. Heat­ing oil gave up 3 cents to $1.54 a gal­lon and nat­u­ral gas rose 4 cents to $3.11 per 1,000 cu­bic feet. Over­seas, France’s CAC 40 rose 0.3 per­cent and the FTSE 100 in Britain picked up 0.1 per­cent. Ger­many’s DAX edged down 0.2 per­cent. Ja­pan’s bench­mark Nikkei 225 gained 0.6 per­cent and South Korea’s Kospi fell 0.2 per­cent. In Hong Kong the Hang Seng lost 0.8 per­cent. —AP

NEW YORK: A minia­ture re­pro­duc­tion of Ar­turo Di Mod­ica’s “Charg­ing Bull” sculp­ture sits on dis­play at a street ven­dor’s ta­ble out­side the New York Stock Ex­change, in lower Man­hat­tan. — AP

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