Oil, banks push Dow to high; tech firms dive

En­ergy com­pa­nies still rid­ing buzz from news that OPEC plans to cut oil pro­duc­tion next year.

The Denver Post - - BUSINESS - By Mar­ley Jay

Tech­nol­ogy com­pa­nies plunged Thurs­day, and high-div­i­dend stocks also took hefty losses as bond yields rose to their high­est level in more than a year. But more big gains for blue-chip bank­ing and oil stocks pulled the Dow Jones in­dus­trial av­er­age to a record high.

Big names like Face­book and Or­a­cle fell as tech­nol­ogy com­pa­nies took their big­gest losses in two months. Ris­ing bond yields pushed in­come-seek­ing in­vestors away from real es­tate and util­ity com­pa­nies. Health care stocks also slumped.

Banks con­tin­ued to soar as in­vestors ex­pect them to make big­ger prof­its on loans as in­ter­est rates rise. Oil prices climbed for the sec­ond day af­ter the coun­tries of OPEC agreed to trim oil pro­duc­tion next year.

Karyn Ca­vanaugh, se­nior market strate­gist for Voya In­vest­ment Strate­gies, said a fo­cus on Pres­i­dent-elect Don­ald Trump’s trade poli­cies might be hurt­ing tech stocks. On Thurs­day Trump toured a Car­rier fac­tory in In­di­ana af­ter an­nounc­ing the com­pany will keep some op­er­a­tions at the fa­cil­ity in­stead of mov­ing them to Mex­ico. He warned of con­se­quences for com­pa­nies that send jobs out of the coun­try.

“If you’re go­ing to bring jobs back to Amer­ica and make stuff here, tech is go­ing to be pretty vul­ner­a­ble,” she said. “If there’s go­ing to be a trade war, tech is pretty vul­ner­a­ble.”

The Dow gained 68.35 points, or 0.4 per­cent, to 19,191.93, its high­est close on record. The Stan­dard & Poor’s 500 in­dex dropped 7.73 points, or 0.4 per­cent, to 2,191.08. The Nas­daq com­pos­ite fell 72.57 points, or 1.4 per­cent, to 5,251.11.

Stock in­dexes set records af­ter the pres­i­den­tial elec­tion last month, but lately they have wob­bled as dif­fer­ent in­dus­tries were pulled in op­po­site di­rec­tions.

Bond prices con­tin­ued to tum­ble, send­ing bench­mark yields higher. The yield on the 10-year Trea­sury note rose to 2.44 per­cent from 2.38 per­cent, its high­est since July 2015. That sent bank stocks higher be­cause higher bond yields are linked to higher in­ter­est rates, which al­low banks to make more money from lend­ing.

Gold­man Sachs jumped $7.34, or 3.3 per­cent, to $226.63 and JPMor­gan Chase picked up $1.62, or 2 per­cent, to $81.79. Gold­man is trad­ing at its high­est price since De­cem­ber 2007.

Face­book skid­ded $3.32, or 2.8 per­cent, to $115.10 and chip­maker Ana­log De­vices dropped $5.23, or 7 per­cent, to $69.01. Mi­crosoft lost $1.06, or 1.8 per­cent, to $59.20.

Af­ter a big gain Wed­nes­day, the dol­lar slipped to 114.04 yen from 114.22 yen. The euro rose to $1.0645 from $1.0599. In the last few weeks the dol­lar has reached a 13-year high com­pared to other cur­ren­cies.

Oil prices ral­lied again and reached their high­est level since mid-Oc­to­ber. Bench­mark U.S. crude picked up $1.62, or 3.3 per­cent, to close at $51.06 a bar­rel in New York. Brent crude, the stan­dard for pric­ing in­ter­na­tional oils, added $2.10, or 4.1 per­cent, to $53.94 a bar­rel in Lon­don. Chevron gained $1.73, or 1.6 per­cent, to $113.29 and Phillips 66 rose $1.90, or 2.3 per­cent, to $84.98.

The price of oil has mostly traded be­tween $40 and $50 a bar­rel since early April. It dipped as low as $26 a bar­rel in Fe­bru­ary.

Auto sales climbed in Novem­ber and broke out of a re­cent slump. U.S. auto sales broke records last year and there have been some signs re­cently that de­mand is wan­ing, but on Thurs­day, a Toy­ota ex­ec­u­tive said he thought sales could set a record in 2016.

GM and Ford climbed af­ter they re­ported stronger sales growth than an­a­lysts ex­pected. Ford gained 47 cents, or 3.9 per­cent, to $12.43 and Gen­eral Mo­tors rose $1.90, or 5.5 per­cent, to $36.43.

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