Stocks fall as crude oil prices drop 4 percent; banks climb
NEW YORK — Major U.S. indexes closed mostly lower Monday as investors bought banks but sold most other types of stocks, including health care and technology companies. Energy stocks sank along with oil prices.
Oil prices fell more than 4 percent after U.S. officials suggested the U.S. will take a softer stance on countries that import oil from Iran after sanctions on Iran’s energy sector go back into effect in November. Banks rose along with interest rates as well as a solid second-quarter report from Bank of America. A strong forecast gave Deutsche Bank its biggest gain in more than a year.
Amazon jumped in midday trading as investors expected strong sales during the company’s annual Prime Day promotion, one of its largest sales days of the year, but the stock gave up much of that gain following problems with the company’s website. Most other groups of stocks lost ground, and about two-thirds of the companies on the New York Stock Exchange finished lower. Smaller companies fared the worst.
The S&P 500 index lost 2.88 points, or 0.1 percent, to 2,798.43. The Dow Jones Industrial Average rose 44.95 points, or 0.2 percent, to 25,064 as Goldman Sachs, JPMorgan Chase, and Boeing climbed. The Nasdaq composite fell 20.26 points, or 0.3 percent, to 7,805.72.
The Russell 2000 index of smaller-company stocks declined 8.48 points, or 0.5 percent, to 1,678.60.
Stocks finished at fivemonth highs Friday as investors remained optimistic about the U.S. economy even as they worried about the trade war between the U.S. and China.
Bank of America’s second-quarter profits jumped 33 percent and surpassed Wall Street estimates. Like other big banks, it got a big boost from the corporate tax cut that passed at the end of 2017 and from higher interest rates. Its stock rose 4.3 percent to $29.78.
Deutsche Bank jumped 8 percent to $12.14 after it said its earnings will be considerably higher than analysts expected. Deutsche Bank has taken three years of losses based on high costs and big fines and penalties linked to past misconduct, and the stock is down 36 percent in 2018.
Benchmark U.S. crude fell 4.2 percent to $68.06 in New York. Brent crude, used to price international oils, fell 4.6 percent to $71.84 a barrel in London.
Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo said countries and businesses that import oil from Iran could avoid penalties if they reduce those imports significantly. Recently the U.S. government was pressuring countries to stop buying Iranian oil entirely. The U.S.will reinstitute sanctions on Iran’s energy sector in early November as a result of the American withdrawal fromthe Iran nuclear deal.
Tribune Media and Sinclair Broadcast Group both nosedived after the Federal Communications Commission said it has concerns about Sinclair’s plan to buy Tribune. Right-leaning TV station operator Sinclair is the largest operator of local TVstations in the U.S., and it has proposed selling some of its own TV stations as part of the $3.9 billion deal. Tribune Media plunged 16.7 percent to $32.12 and Sinclair skidded 11.7 percent to $29.10.
Online retail giant Amazon jumped as much as 1.6 percent at the start of its Prime Day promotion, but finished with a gain of 0.5 percent at $1,822.49. Still, Amazon is up 56 percent in 2018 and is responsible for about 19 percent of the total return of the S&P 500 over that time.
Netflix rose 1.2 percent to $400.48 during the day, but plunged 13.1 percent in aftermarket trading as its estimate for third-quarter subscriber growth fell short of projections. The streaming video company’s shares havedoubled this year, but if the late move is any indication the stock could be on track for its biggest loss in twoyears on Tuesday.