By Alex Veiga And Marley Jay
THE ASSOCIATED PRESS
U.S. stocks are mixed Thursday as steep losses for banks and insurance companies are countered by gains in health care and technology companies. Banks are tumbling with bond yields, and insurance companies are falling as investors weighed the prospects of big losses caused by Hurricane Irma, which is projected to hit Florida this weekend.
KEEPING SCORE: The Standard & Poor’s 500 index fell 2 points, or 0.1 per cent, to 2,462 as of 3:30 p.m. Eastern time. The Dow Jones industrial average slid 57 points, or 0.3 per cent, to 21,750. The Nasdaq composite remained at 6,393. The Russell 2000 index of smaller-company stocks gave up 4 points, or 0.3 per cent, to 1,397.
HURRICANE WATCH: Insurance companies slumped as Hurricane Irma cut a path of devastation across the northern Caribbean, leaving at least 10 dead and thousands homeless. Reinsurance companies fell sharply because many of their policies are for catastrophic losses such as those caused by a hurricane.
XL Group fell $1.90, or 4.9 per cent, to $36.55 while Everest Re slid $15.38, or 6.8 per cent, to $212. Berkshire Hathaway, which owns GEICO and other insurers, slumped $3.37, or 1.9 per cent, to $173.42.
WEATHER OUTLOOK: The economy “is going to suffer a few dents from the storms,” said John DeClue, chief investment officer for U.S. Bank Private Wealth Management. While damage from hurricanes Harvey and Irma may slow the economy for a few months, DeClue said it “is in remarkably good shape,” which will help stocks keep rising.
He also said the effects of the storms will make sure the Federal Reserve moves slowly in raising interest rates.
EUROPE: The European Central Bank raised its economic growth forecast for the region this year. The central bank left its key interest rates and bond-purchase stimulus program unchanged, but investors expect the bank to start reducing its stimulus activity soon as the European economy continues to improve.
The ICE US dollar index, which measures the dollar’s value against a basket of other major currencies, continued to fall and reached its lowest level since January 2015. The euro strengthened to $1.2003 from $1.1913 and the dollar fell to 108.65 yen from 109.37 yen.
That helped technology companies, which make most of their sales overseas. Microsoft added $1.09, or 1.5 per cent, to $74.50. The weaker dollar makes U.S.-made products less expensive in other markets and increases company profits when they are converted back into dollars. That’s one reason tech companies have done far better than any other S&P 500 sector this year.
HEALTH CARE: AbbVie rose $4.70, or 6.1 per cent, to $81.75 and Bristol-Myers gained $2.92, or 4.9 per cent, to $62.79 after the companies reported positive clinical trial results. Eli Lilly climbed $1.07, or 1.3 per cent, to $81.58 after it said it will cut 3,500 jobs, or about 9 per cent of its total jobs. Biotechnology companies also rallied.
BONDS: Bond prices climbed and yields fell to their lowest level since November. The yield on the 10-year Treasury note fell to 2.05 per cent from 2.11 per cent late Wednesday. Lower bond yields are linked to lower rates on loans, and banks took steep losses. Bank of America fell 54 cents, or 2.3 per cent, to $22.88 and U.S. Bancorp lost $1.08, or 2.1 per cent, to $49.83.
MEDIA WOES: Cable providers and cable channel operators fell after Comcast said it expects to lose as many as 150,000 video subscribers in the third quarter and that competition has been unusually intense. It said intense storms also contributed to the problem. Comcast dropped $2.39, or 5.8 per cent, to $38.78.
Meanwhile Disney fell after CEO Bob Iger said the company’s earnings this year will be about the same as the year before, which disappointed analysts. Its stock lost $4.93, or 4.9 per cent, to $96.57.
CHARGE IT: MasterCard rose $3.51, or 2.6 per cent, to $136.40 after the debit and credit card payment processor raised its 2017 revenue forecast and its growth forecast for next year. Rival Visa also jumped $1.26, or 1.2 per cent, to $104.44 and PayPal and eBay also advanced.
BIG JUMP: RH vaulted after the furniture and housewares retailer raised its annual forecasts after a strong second-quarter report. The stock surged $20.61, or 41.7 per cent, to $70.03.
TAKING A SHINE: Gold rose to its highest price in a year as it climbed $11.30 to $1,350.30 an ounce. Silver jumped 21 cents, or 1.2 per cent, to $18.12 an ounce. Copper dipped 1 cent to $3.14 a pound.
ENERGY: Benchmark U.S. crude fell 7 cents to $49.09 a barrel in New York. Brent crude, used to price international oils, gained 29 cents to $54.49 a barrel in London.
Wholesale gasoline lost 1 cent to $1.66 a gallon. Heating oil rose 3 cents to $1.79 a gallon. Natural gas dipped 2 cents to $2.98 per 1,000 cubic feet.
MARKETS OVERSEAS: The German DAX rose 0.7 per cent and the CAC 40 in France gained 0.3 per cent. The British FTSE 100 rose 0.6 per cent. In Asia, Japan’s benchmark Nikkei 225 rose 0.2 per cent, while South Korea’s Kospi jumped 1.1 per cent. Hong Kong’s Hang Seng index gave up early gains to fall 0.3 per cent.