US stocks inch higher in slow pre-hol­i­day trad­ing

Kuwait Times - - BUSINESS -

Wall Street traders some­times root for year-end “Santa Claus ral­lies,” but on Fri­day, hardly a crea­ture was stir­ring as stocks fin­ished slightly higher on the qui­etest full day of trad­ing in more than a year. Health care com­pa­nies brought in most of the gains.

Ma­jor US in­dexes stayed in a narrow range through­out the day. Drug­mak­ers and other com­pa­nies in health care did the best, while retailers con­tin­ued to take small losses just be­fore the hol­i­day. En­ergy com­pa­nies also slipped, and they took their first weekly loss since the begin­ning of Novem­ber. The Dow Jones in­dus­trial av­er­age, how­ever, rose for the sev­enth week in a row.

De­fense con­trac­tor Lock­heed Martin fell af­ter Pres­i­dent-elect Don­ald Trump again tweeted that the com­pany’s F-35 fighter jet costs too much. The stock is down al­most 6 per­cent this month. “This is a ne­go­ti­at­ing tac­tic,” said Josh Sul­li­van, a Sea­port Global an­a­lyst who cov­ers aero­space and de­fense com­pa­nies. “You’re see­ing the neg­a­tive por­tion of the ne­go­ti­a­tion in public where pri­vately they may be more con­struc­tive.”

The Dow Jones in­dus­trial av­er­age picked up 14.93 points, or 0.1 per­cent, to 19,933.81. The Stan­dard & Poor’s 500 in­dex gained 2.83 points, or 0.1 per­cent, to 2,263.79. The Nas­daq com­pos­ite rose 15.27 points, or 0.3 per­cent, to 5,462.69.

Small-com­pany stocks did far bet­ter, as the Russell 2000 climbed 8.85 points, or 0.6 per­cent, to 1,371.51. Fewer than 2 bil­lion shares changed hands on the New York Stock Ex­change. That’s barely half the vol­ume of an av­er­age day. The last full trad­ing day with that lit­tle ac­tiv­ity was in Oc­to­ber 2015. Lock­heed Martin fell af­ter Trump said on Twit­ter that Lock­heed’s F-35 fighter jet costs too much and that he has asked Boe­ing to “price-out” a com­pa­ra­ble F-18 jet. Trump com­plained ear­lier this month about the costs of the F-35, which brought in about 20 per­cent of Lock­heed’s rev­enue last year. Lock­heed gave up $3.21, or 1.3 per­cent, to $249.59.

This month Trump also crit­i­cized Boe­ing for the cost of the next Air Force One. The pres­i­den­tial jet is far less sig­nif­i­cant for Boe­ing than the F35 is for Lock­heed, how­ever, and Boe­ing shares were only briefly af­fected.

Sul­li­van, of Sea­port, said Trump’s tweets are a new type of bad pub­lic­ity for de­fense com­pa­nies. But even if the Pres­i­dent-elect pe­ri­od­i­cally crit­i­cizes the com­pa­nies in public, in­vestors are still op­ti­mistic about their prospects un­der his ad­min­is­tra­tion. If Trump builds up the US nu­clear ar­se­nal, as he pro­posed do­ing in a tweet Thurs­day, that would also in­volve more mil­i­tary spend­ing.

De­fense spend­ing

“Ul­ti­mately (Trump) ran on a strong de­fense spend­ing plat­form,” he said. De­fense stocks have done bet­ter than the rest of the mar­ket over­all since the elec­tion.

So far, in­vestor op­ti­mism that Trump’s spend­ing plans could boost eco­nomic growth is out­weigh­ing any con­cerns about his trade pro­pos­als, brash style and Twit­ter pro­nounce­ments, which have moved com­pany stocks at times. That may change when he’s in of­fice and can more eas­ily back up his com­ments with ex­ec­u­tive ac­tions and pol­icy shifts. Drug com­pa­nies made small gains on Fri­day. Bo­tox maker Al­ler­gan rose $5.09, or 2.6 per­cent, to $199.08. Bris­tol-My­ers Squibb picked up 85 cents, or 1.4 per­cent, to $59.61 and health in­surer Aetna added $1.26, or 1 per­cent, to $125.95.

Cin­tas, a uni­form rental com­pany, slipped af­ter its sec­ond-quar­ter profit fell short of Wall Street’s fore­casts. An­a­lysts said its first-aid busi­ness, which sells prod­ucts like first-aid kits, eye­wash sta­tions and emer­gency cab­i­nets, had a dis­ap­point­ing quar­ter. The stock lost $3.73, or 3.1 per­cent, to $116.36.

Bench­mark US crude added 7 cents to close at $53.02 a bar­rel in New York. Brent crude, the in­ter­na­tional stan­dard, rose 11 cents to close at $55.16 a bar­rel in Lon­don.

In other en­ergy trad­ing, natural gas prices con­tin­ued to climb as in­vestors an­tic­i­pated that colder weather will lead to more de­mand for home heat­ing. Natural gas futures rose 12 cents, or 3.5 per­cent, to $3.66 per 1,000 cu­bic feet. Whole­sale gaso­line added 2 cents to $1.63 a gal­lon and heat­ing oil stood still at $2.48 a gal­lon. The dol­lar slid to 117.26 yen from 117.60 yen. The euro rose to $1.0452 from $1.0433. Bond prices rose. The yield on the 10-year Trea­sury note fell to 2.54 per­cent from 2.55 per­cent. The price of gold rose $2.90 to $1,133.60 an ounce. Silver lost 11 cents to $15.76 an ounce. Cop­per gave up 2 cents to $2.48 a pound. Bri­tain’s FTSE 100 and the CAC-40 in France both rose 0.1 per­cent. In Ger­many, the DAX lost 0.1 per­cent. The Hang Seng of Hong Kong re­treated 0.3 per­cent and the Kospi in South Korea fin­ished slightly lower. Ja­panese mar­kets were closed for a hol­i­day. —AP

NEW YORK: Traders Fred DeMarco (left) and Greg Mul­li­gan con­fer as they work on the floor of the New York Stock Ex­change. —AP

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