Media, healthcare companies slump
U.S. stocks slipped Wednesday as media and healthcare companies fell. The Federal Reserve left interest rates unchanged, but bond yields and banks rose as investors felt rates will increase soon.
First-quarter results for most companies have been good, but stocks were lower all day as a few big-name firms posted shaky results.
Media firms slumped after Time Warner said cable advertising revenue fell in the first quarter. Time Warner has agreed to be bought by AT&T, so its stock hardly budged, but its competitors slumped. Walt Disney fell 2.4% to $111.62, its biggest decline in almost a year. Viacom slid 7.5% to $39.26, CBS dropped 3.4% to $63.46 and 21st Century Fox sank 5.1% to $28.88.
Irish generic drug maker Perrigo said its offices were searched as part of a Justice Department investigation into pricing by generic drug companies, and its stock dropped 5.1% to $72.35. Several other companies have previously disclosed subpoenas connected to that probe, including Mylan and Lannett. Mylan fell 2.6% to $37.19. Lannett had a disappointing quarter as drug pricing remained weak and its stock dived 18.6% to $22.10.
Biotech drugmaker Gilead Sciences reported disappointing profit and revenue as sales of its hepatitis C drugs Sovaldi and Harvoni plunged in all major markets, and its stock fell 2% to $67.21.
Bond prices turned lower. The yield on the 10year Treasury note rose to 2.32% from 2.29%, and bank shares climbed.
U.S. benchmark crude rose 16 cents to $47.82 a barrel. Brent crude, used to price international oils, rose 33 cents to $50.79 a barrel.
Wireless spectrum license firm Straight Path Communications soared 23.4% to $155.20. It said it has received an all-stock offer worth $135.96 a share from an undisclosed buyer. AT&T had agreed to pay $95.63 a share. The company said it told AT&T the new offer is superior, and AT&T will have three days to decide if it wants to raise its offer.
Vehicle parts maker Delphi Automotive surged 10.9% to $87.01 after it said it will spin off its powertrain systems business.
Molina Healthcare rose 7.4% to $64.15 the day after the Long Beach insurer said it had fired its president and chief executive and its chief financial officer. It’s up nearly 29% this week.
Wholesale gasoline rose 2 cents to $1.53 a gallon. Heating oil stayed at $1.47 a gallon. Natural gas rose 3 cents to $3.23 per 1,000 cubic feet.
Gold fell $8.50 to $1,248.50 an ounce. Silver fell 29 cents to $16.55 an ounce. Copper dropped 9 cents, or 3.5%, to $2.54 a pound.
The dollar rose to 112.64 yen from 112 yen. The euro slid to $1.0906 from $1.0928.