VOL. 42 | NO. 28 | Friday, July 13, 2018
Stocks fall as crude oil prices drop 4 percent; banks climb
NEW YORK (AP) — 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 five-month 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 from the 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 TV stations 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, according to S&P Dow Jones Indices.
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 analysts' projections. The streaming video company's shares have doubled this year, but if the late move is any indication the stock could be on track for its biggest loss in two years on Tuesday.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.85 percent from 2.83 percent. High-dividend companies like real estate investment trusts fell as investors who wanted income bought bonds instead.
Arconic, a company that makes aluminum parts for companies in the aerospace and automobile industries, soared after the Wall Street Journal reported that private equity firms are interested in buying it. The stock climbed 10.5 percent to $19.20, which gave Arconic a market value of about $9.3 billion. The stock has fallen almost 40 percent since mid-January.
Alliance Data Systems, which manages loyalty and rewards programs for retailers, fell 10.1 percent to $218.97 after it said late and delinquent payments increased in the second quarter.
Gold fell 0.1 percent to $1,239.70 an ounce. Silver was unchanged at $15.81 an ounce. Copper lost 0.4 percent to $2.76 a pound.
Wholesale gasoline skidded 5 percent to $2 a gallon. Heating oil dropped 3.7 percent to $2.05 a gallon. Natural gas added 0.3 percent to $2.76 per 1,000 cubic feet.
The dollar stayed at 112.30 yen. The euro climbed to $1.1714 from $1.1677.
Germany's DAX rose 0.2 percent while the CAC 40 in France dipped 0.4 percent. The FTSE 100 index in Britain dropped 0.8 percent. Hong Kong's Hang Seng edged 0.1 percent higher and the Kospi in South Korea fell 0.4 percent.
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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jay