In­sur­ers’ stocks fall; tech firms rise

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - MAR­LEY JAY

NEW YORK — U. S . stocks were di­vided Tues­day as shares of health in­sur­ers de­clined af­ter the fail­ure of the lat­est Repub­li­can health care bill, while a big jump in sub­scribers for Net­flix sent tech­nol­ogy and con­sumer­fo­cused com­pa­nies higher.

The Stan­dard & Poor’s 500 in­dex rose 1.47 points, or 0.1 per­cent, to 2,460.61, sur­pass­ing the record it had set Fri­day. The Dow Jones in­dus­trial av­er­age fell 54.99 points, or 0.3 per­cent, to 21,574.73. The Nas­daq com­pos­ite climbed 29.87 points, or 0.5 per­cent, to 6,344.31 as tech com­pa­nies such as Facebook and Al­pha­bet, the par­ent of Google, rose. Af­ter a plunge in June, the Nas­daq has surged over the past two weeks.

The Rus­sell 2000 in­dex of smaller-com­pany stocks sank 3.99 points, or 0.3 per­cent, to 1,427.61. That in­dex closed at a record high Mon­day.

Stocks spent most of the day lower af­ter the health care push stalled and sev­eral fi­nan­cial firms, in­clud­ing Gold­man Sachs, re­ported un­der­whelm­ing sec­ond-quar­ter re­sults. En­ergy and in­dus­trial com­pa­nies also slipped.

Wall Street did not have a big re­ac­tion to the Repub­li­can health care bill’s de­feat in the Se­nate, as it did when a sim­i­lar bill failed in the House in March. Af­ter four months of law­mak­ers strug­gling over health care, in­vestors don’t ex­pect as much from con­gres­sional Repub­li­cans and Pres­i­dent Donald Trump on other is­sues.

“Tax changes aren’t likely to take place any­time soon and are likely to be smaller than they hoped,” said Kate Warne, an in­vest­ment strate­gist for Ed­ward Jones.

Sev­eral ma­jor banks re­ported strong sec­ond-quar­ter re­sults, but that wasn’t enough to get in­vestors ex­cited. Bank of Amer­ica and Gold­man Sachs both said their trad­ing busi­nesses strug­gled, as the mar­ket has been calm for months. Banks did very well in the first quar­ter, and Warne said in­vestors may have been caught off guard that the sec­ond quar­ter doesn’t look as good for them.

“When they’re not ben­e­fit­ing as much as ex­pected from higher in­ter­est rates, I think that makes in­vestors more cau­tious about what re­sults will look like go­ing for­ward,” Warne said.

Net­flix shares jumped af­ter the com­pany said it added 5.2 mil­lion sub­scribers over the past three months, and for the first time, it has more sub­scribers out­side the U.S. than in it. The sec­ond quar­ter is usu­ally a slow pe­riod for Net­flix, so in­vestors were pleased to see the big gain. Net­flix gained $21.90, or 13.5 per­cent, to $183.60. Among other con­sumer com­pa­nies, Ama­zon added $14.41, or 1.4 per­cent, to $1,024.45.

Facebook gained $3.13, or 2 per­cent, to $162.86, and Al­pha­bet picked up $10.99, or 1.1 per­cent, to $986.85.

Shares of health in­sur­ers de­clined. Aetna fell $1.69, or 1.1 per­cent, to $ 153.31, and An­them re­treated $2.64, or 1.4 per­cent, to $189.45. Unit­edHealth, the largest com­pany in the in­dus­try, inched higher af­ter it re­ported strong sec­ond-quar­ter re­sults and raised its an­nual out­look. It gained 50 cents, or 0.3 per­cent, to $186.85.

Bond prices rose. The yield on the 10-year Trea­sury note slid to 2.26 per­cent from 2.31 per­cent. That also hurt bank stocks.

Bench­mark U. S. crude added 38 cents to $46.40 a bar­rel in New York. Brent crude, the in­ter­na­tional stan­dard, rose 42 cents to $48.84 a bar­rel in London.

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