The News Herald (Willoughby, OH)
Health care, industrial companies lower stocks
Losses for health care companies and banks left U.S. stocks lower Monday after a quiet day of trading.
NEW YORK » Losses for health care companies and banks left U.S. stocks lower Monday after a quiet day of trading. Industrial conglomerate General Electric skidded after announcing more changes in its leadership.
Companies that distribute or sell prescription drugs continued to slide following speculation that Amazon plans to get into that business, something the company has not confirmed.
Banks dipped after a big rally over the last month and technology companies continued to climb. Smaller, more domestically-focused companies declined as investors tried to gauge the odds for tax cuts.
Stocks have rallied over the last two weeks as investors hope tax cuts proposed by the Trump administration and Congressional Republicans will boost corporate profits. But over the weekend President Donald Trump entered a war of words with Senator Bob Corker, a retiring Republican who has a reputation as a budget hawk. Republicans have a narrow majority and losing just a few votes could derail a bill.
“There really is not much leeway there,” said Mona Mahajan, U.S. investment strategist for Allianz Global Investors. “They somehow have to get their act together.”
The Standard & Poor’s 500 index dipped 4.60 points, or 0.2 percent, to 2,544.73. The Dow Jones industrial average shed 12.60 points, or less than 0.1 percent, to 22,761.07. The Nasdaq composite fell 10.45 points, or 0.2 percent, to 6,579.73, which ended a nine-day winning streak. The Russell 2000 index of smaller-company stocks lost 6.66 points, or 0.4 percent, to 1,503.56.
Stock trading was light because of the Columbus Day holiday in the U.S. Bond trading was closed.
General Electric slipped after it named Ed Garden of Trian Fund Management to its board of directors. Trian, a well-known activist investment firm founded by Nelson Peltz, has been pushing the conglomerate to slim down. GE lost 96 cents, or 3.9 percent, to $23.43. It’s down 26 percent this year.
GE has announced slew of changes in its leadership this month. John Flannery replaced Jeffrey Immelt as CEO a week ago, several months ahead of the schedule the company announced in June. On Friday GE said Chief Financial Officer Jeffrey Bornstein will leave at the end of the month. Two vice chairs are also retiring.
Health care companies did worse than the rest of the market. Companies that distribute or sell prescription medicines or administer prescription drug benefits tumbled for a second day as investors continued to worry about Amazon entering the prescription drug business. Analysts raised that possibility Friday. Amazon has declined to comment.
Pharmacy benefits manager Express Scripts lost $3.14, or 5 percent, to $59.22 and prescription drug distributor McKesson dropped $3.15, or 2.1 percent, to $148.14 while Walgreens gave up $2.33, or 3.2 percent, to $70.87, its lowest close in more than a year and a half.
Medical device maker Medtronic gave up $2.88, or 3.6 percent, to $76.93. The company said late Friday that Hurricane Maria will reduce its quarterly profit and revenue by about $250 million. Medtronic has four facilities in Puerto Rico that were damaged by the storm and manufacturing won’t fully recover for weeks.
Third-quarter earnings reports will start later this week when major banks start announcing their results. Investors expect continued strong results from technology companies. The industry has led the market higher for most of this year. Chipmaker Nvidia added $4.09, or 2.3 percent, to $185.39 and cloud computing company Citrix Systems gained $1.15, or 1.4 percent, to $80.62.
Three major hurricanes hit the U.S. in the last two months, and experts expect that to affect economic growth and corporate profits.