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VOL. 42 | NO. 49 | Friday, December 7, 2018
US stocks rise again; tech and high-dividend companies climb
NEW YORK (AP) — U.S. stocks are mixed in morning trading Thursday as technology and health care companies rise. Safer, high-dividend stocks in real estate and utilities are also climbing. Banks are falling, and smaller companies continue to lag their larger rivals.
The European Central Bank said it will end its bond-buying economic stimulus program at the end of the year, but trimmed its forecasts for economic growth across Europe. Government bond yields in Europe are falling.
KEEPING SCORE: The S&P 500 index added 5 points, or 0.2 percent, to 2,656 at 10:30 a.m. Eastern time. The Dow Jones Industrial Average rose 113 points, or 0.5 percent, to 24,640. The Nasdaq composite edged up 8 points, or 0.1 percent, to 7,106.
Trading has been turbulent this week, but the S&P 500 is on pace for its third gain in four days.
The Russell 2000 index of smaller companies fell 2 points, or 0.2 percent, to 1,452. It's fallen almost 17 percent since setting a record high in late August, and over the last few days it's traded at its lowest level since September 2017. Among other issues, that reflects investors' fears about slowing economic growth in the U.S. and rising interest rates. Smaller companies are more vulnerable in times of slower growth, and they tend to carry higher levels of debt than larger companies do. Higher rates make those debts more costly.
ECB ENDS STIMULUS: The European Central Bank said it will halt its bond-buying program, even though the region's economy is slowing. It has been pumping money into the economy for almost four years and spent about $3 trillion in the process. The bank isn't ending its stimulus program entirely, as it will continue to invest money from maturing bonds and will take other steps to encourage banks to lend money.
Credit conditions around the world are gradually getting tighter, as the Federal Reserve has been steadily raising interest rates for three years and is letting its balance sheet shrink.
European investors appeared to take the news in stride. Germany's DAX advanced 0.1 percent while the CAC 40 in France was down 0.1 percent. Britain's FTSE 100 index was little changed. Bond prices rose and yields fell in the U.K., Germany, France and other countries.
QUACKING ABOUT A DEAL: Insurer Aflac rose 4.6 percent to $44.86 after it confirmed reports that it's in discussions with Japan Post Holdings about a possible investment. Aflac said the Japanese shipping and financial conglomerate might take a minority stake in the company.
CLEANUP IN AISLE FOUR: CVS Health fell after the New York Post reported that a U.S. District Court judge appears likely to block its purchase of health insurer Aetna at a hearing next week. CVS announced the closing of the $69 billion Aetna deal in late November after the U.S. Department of Justice cleared it. But Judge Richard Leon has reportedly said in hearings that he still has concerns about the antitrust implications of the deal. Citing sources close to the case, the Post said Leon might issue an order barring the two companies from integrating their operations.
CVS fell 2.5 percent to $72.66, and it's down 8.6 percent since an earlier hearing on Dec. 3.
GE JUICED UP: General Electric climbed 10 percent to $7.39 after JMorgan Chase analyst C. Stephen Tusa upgraded the stock to "Neutral" from "Underweight" saying it believes the risks and rewards to the stock are balanced. GE has lost almost 60 percent of its value this year and has plunged almost 90 percent since the beginning of 2017. The company recently replaced its CEO and slashed its dividend in an attempt to shore up its finances, but analysts are concerned that several of its businesses are years away from being profitable.
BREXIT: British Prime Minister Theresa May won a confidence vote among lawmakers from within her Conservative Party, which means she won't face another leadership challenge for at least another year. Earlier this week the pound fell to 20-month lows after May pulled a vote on her Brexit divorce deal with the European Union. It's recovered slightly since then.
BONDS: Bond prices were little changed. The yield on the 10-year Treasury note remained at 2.90 percent.
ASIA: The Japanese Nikkei 225 index gained 1 percent and Hong Kong's Hang Seng jumped 1.3 percent while the Kospi in South Korea added 0.6 percent.
CURRENCIES: The dollar rose to 113.61 yen from 113.22 yen. The euro fell to $1.1344 from $1.1367. The British pound edged down to $1.2630 from $1.2634.
ENERGY: Benchmark U.S. crude oil rose 1 percent to $51.68 per barrel in New York. Brent crude, the international standard, rose 0.3 percent to $60.31 per barrel in London.
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AP Markets Writer Marley Jay contributed. He can be reached at http://twitter.com/MarleyJayAP