Drug­maker losses pull stocks lower; small-cap surge goes on

Kuwait Times - - BUSINESS -

NEW YORK: Ma­jor US stock in­dexes slipped yes­ter­day as drug com­pa­nies dragged the mar­ket lower. Small-com­pany stocks bucked the down­ward trend and con­tin­ued to climb, and bond yields rose to their high­est level in a year. Drugmakers like Merck and biotech com­pany Am­gen took some of the biggest losses Fri­day. Weak re­sults from Gap and Aber­crom­bie & Fitch hurt re­tail­ers as in­vestors kept a close eye on the up­com­ing hol­i­day sea­son.

Small com­pa­nies in­clud­ing regional banks con­tin­ued to make large gains. Those stocks have risen sharply since the pres­i­den­tial elec­tion last week and are now at record highs.

“Some of the pro­pos­als that (Pres­i­dent-elect Don­ald) Trump has pro­moted, specif­i­cally dereg­u­la­tion and also some of his trade pro­pos­als, are bet­ter for small com­pa­nies than po­ten­tially they are for large ones,” said Katie Nixon, chief in­vest­ment of­fi­cer for North­ern Trust.

The Dow Jones in­dus­trial av­er­age slid 35.89 points, or 0.2 per­cent, to 18,867.93. The Stan­dard & Poor’s 500 in­dex lost 5.22 points, or 0.2 per­cent, to 2,181.90. The Nasdaq com­pos­ite touched a record high early on, but turned lower and gave up 12.46 points, or 0.2 per­cent, to 5,321.51.

That’s not a big loss, but the ma­jor in­dexes hadn’t fallen that much since be­fore the pres­i­den­tial elec­tion. Still, the S&P 500 and Nasdaq fin­ished sub­stan­tially higher this week af­ter their big gains the week be­fore. But in­dexes of smaller com­pa­nies, like the Rus­sell 2000 and the S&P 600, did bet­ter. They are on 11-day win­ning streaks and have hit all-time highs.

Among small-com­pany stocks, mort­gage lend­ing ser­vice com­pany Lend­ingTree added $6.80, or 7.3 per­cent, to $100 and coal miner Cloud Peak En­ergy rose 79 cents, or 15.8 per­cent, to $5.79. Losses for drug com­pa­nies weighed down health care stocks. Bo­tox maker Al­ler­gan re­treated $8.20, or 4.1 per­cent, to $191.78 and biotech gi­ant Am­gen fell $2.13, or 1.4 per­cent, to $145.23. Hepati­tis C drug­maker Gilead Sci­ences shed 96 cents, or 1.3 per­cent, to $74.62.

Drug com­pany stocks are com­ing off their biggest weekly gain in two years. The stocks had been fall­ing in the months lead­ing up to the elec­tion be­cause in­vestors wor­ried that un­der a Hil­lary Clin­ton pres­i­dency, the fed­eral gov­ern­ment would take steps to rein in drug prices. Those kinds of steps are less likely un­der a Trump pres­i­dency and a Repub­li­can-con­trolled Congress. The dol­lar con­tin­ued to climb. It’s near one-year highs against the euro and six-month highs against the yen. The dol­lar rose to 110.63 yen from 109.89 yen. The euro fell to $1.0599 from $1.0626.

The dol­lar hasn’t been this strong since early 2003. Nixon of North­ern Trust said that’s af­fect­ing big multi­na­tional com­pa­nies be­cause it can hurt their sales out­side the US, but it’s less of a problem for smaller, do­mes­ti­cally-ori­ented com­pa­nies. In­vestors con­tin­ued to sell US gov­ern­ment bonds at a rapid clip, and bond prices wob­bled and turned lower. The yield on the 10-year Trea­sury note rose to 2.34 per­cent from 2.30 per­cent. Bond prices have fallen hard since the elec­tion and yields are now at their high­est in a year. Teen cloth­ing com­pany Aber­crom­bie & Fitch plunged $2.33, or 13.8 per­cent, to $14.60 af­ter it re­ported weak sales and a smaller profit than an­a­lysts had ex­pected. Gap’s said fewer peo­ple vis­ited its stores head­ing into the hol­i­day sea­son. Its stock gave up $5.10, or 16.6 per­cent, to $25.61. Sport­ing goods Hib­bett Sports re­tailer cut its an­nual fore­casts af­ter a weak third-quar­ter re­port. It dropped $4.90, or 10.8 per­cent, to $40.40.

Shop­pers are not buy­ing as many clothes and mov­ing to­ward dis­count chains. That trend con­tin­ued as dis­count re­tailer Ross Stores rose $2.47, or 3.8 per­cent, to $68 af­ter it posted a bet­terthan-ex­pected profit and sales. Com­pa­nies that sell com­mon house­hold prod­ucts are also mov­ing lower. Proc­ter & Gamble gave up $1.07, or 1.3 per­cent, to $82 and drug­store op­er­a­tor Wal­greens Boots Al­liance slumped 72 cents to $83.27. Those com­pa­nies have fallen since the elec­tion as in­vestors buy com­pa­nies that could ben­e­fit more from faster eco­nomic growth.

Bench­mark US crude rose 27 cents to close at $45.69 a bar­rel in New York, while Brent crude, which is used to price in­ter­na­tional oils, added 37 cents to $46.86 a bar­rel in Lon­don. En­ergy com­pa­nies traded higher. Chevron rose $1.08, or 1 per­cent, to $109.20 and Cono­coPhillips jumped $1.15, or 2.6 per­cent, to $44.76. Gold fell $8.20 to $1,208.70 an ounce. Sil­ver lost 15 cents to $16.62 an ounce. Cop­per dipped 2 cents to $2.47 a pound.

In other en­ergy trad­ing, whole­sale gaso­line stayed at $1.34 a gal­lon. Heat­ing oil picked up 1 cent to $1.46 a gal­lon. Nat­u­ral gas climbed 14 cents, or 5.2 per­cent, to $2.84 per 1,000 cu­bic feet.

France’s CAC 40 fell 0.5 per­cent and the FTSE 100 in Bri­tain dipped 0.3 per­cent. The Ger­man DAX lost 0.2 per­cent. Ja­pan’s bench­mark Nikkei 225 in­dex added 0.6 per­cent as the yen hit a six-month low, help­ing shares of the coun­try’s big ex­porters. South Korea’s Kospi shed 0.3 per­cent and Hong Kong’s Hang Seng rose 0.4 per­cent. —AP

NEW YORK: A pedes­trian walks past the New York Stock Ex­change, in lower Man­hat­tan. —AP

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.