Stocks end wobbly day mostly lower; natural gas prices surge
U.S. stock indexes closed mostly lower Tuesday as losses in health care and technology companies kept gains in energy and other sectors of the market in check.
The S&P 500 ended down less than 0.1% after giving up a modest early gain. Energy companies that stand to benefit from record electricity prices due to the frigid cold impacting much of the country surged. Marathon Oil and Apache Corp. were among the biggest gainers.
Bond yields, which have been ticking higher on expectations of rising inflation, rose sharply. The yield on the 10-year Treasury rose to 1.29%, the highest level in a year. Bank stocks made broad gains on the higher yields, which allow them to charge more lucrative interest rates on loans. Utilities and real estate stocks, bond proxies that can look less attractive when bond yields rise, were among the biggest decliners.
Despite the mostly tentative day of trading, the Dow Jones Industrial Average inched higher, enough to set another all-time high.
“You have a continuation of some of the trends that we’ve had recently and the kind of bifurcation within the market where the things that are benefiting from higher yields are continuing to do well, and that speaks to an improving economy and more inflation,” said Willie Delwiche, investment strategist at All Star Charts.
The S&P 500 slipped 2.24 points to 3,932.59. The Dow rose 64.35 points, or 0.2%, to 31,522.75. The
Nasdaq Composite index fell 47.97 points, or 0.3%, to 14,047.50. The three indexes closed at record highs on Friday. U.S. markets were closed Monday for a holiday.
Stocks of smaller companies fared worse than the broader market. The Russell 2000 index lost 16.47 points, or 0.7%, to 2,272.89.
Optimism that Washington will come through on trillions of dollars of more aid for the economy and encouraging company earnings reports have helped stocks grind higher this month, along with hopes that the coronavirus vaccine rollout will set the stage for stronger economic growth in the second half of this year.
With the second impeachment trial over, investors believe Congress can now make progress toward passing President Biden’s $1.9 trillion stimulus plan. The package would include one-time payments to Americans plus additional assistance to industries, states and jurisdictions impacted by the pandemic.
Vaccine distribution is improving and, separately, new case counts are decreasing. That’s injecting more confidence into the prospects for a recovery while a new round of stimulus could help give people and businesses more money and improve consumer spending.
That long view of the economy, which has been bolstered by mostly upbeat economic data and corporate earnings, has been helping push bond yields higher, said Jason Pride, chief investment officer of private wealth at Glenmede.
“It’s reflecting that optimism,” he said. “Every ounce of information we get seems to confirm these story lines.”
Hasan Al-Mabuk hired Nate and Megan Reed, who own Reed Design Builders, five years ago to build his home in Baker.
Now, the Denver resident has teamed up with the couple to turn the nearly 140-year-old church right across the street into six townhomes — one of which will be his new home.
“I didn’t want to watch someone tear it apart,” AlMabuk said.
The Reeds, Al-Mabuk and Shawn Doughtery, a production manager for Reed Design Builders, purchased the structure at 475 Galapago St. for $700,000 in April 2019, according to property records.
A small religious organization previously used the church, but Al-Mabuk said they helped them look for a new place of worship.
The development team said it’s a multimilliondollar project to convert the building, which according to city records
dates to 1882, into The Holy Townhomes.
Work began this past summer. The development team replaced the roof, excavated the area and put in a new wooden foundation. But they’ve kept details like the building’s lofted ceilings, arched windows, skylights, exposed brick, and even restored an old stained-glass window. The church’s belltower also remains intact.
“The church was basically condemned, but we’ve tried to keep as much of the architecture intact as we could,” Nate Reed said.
The ownership group has experience with religious conversion. AlMabuk and the Reeds were involved with turning the former church at 4190 Xavier St. in the Berkeley neighborhood into a single-family home in 2018.
The team hopes to be done with the Baker project in the next few months and plans to put five units on the market in March with a base starting price of $550,000. Al-Mabuk plans to move into the sixth himself.