By Alex Veiga, The Associated Press on January 11, 2017.
Energy companies led U.S. stocks mostly higher in midday trading Wednesday as crude oil prices headed higher. Health care stocks slumped after President-elect Donald Trump said the government needs to overhaul its bidding process for drugs from pharmaceutical companies. Investors were looking ahead to the start of corporate earnings reports later this week.
KEEPING SCORE: The Dow Jones industrial average rose 73 points, or 0.4 per cent, to 19,928 as of 12 p.m. Eastern Time. The Standard & Poor’s 500 index gained 2 points, or 0.1 per cent, to 2,271. The Nasdaq composite index fell less than 1 point to 5,551. The Nasdaq has closed at a record high the past four days in a row.
TRUMP FACTOR: During a press conference Wednesday morning, Trump said the government has to create new bidding procedures for the pharmaceutical drug industry “because they’re getting away with murder.” The remarks sent health care stocks broadly lower. Several pharmaceutical companies slumped, with Endo International falling 10.3 per cent, the biggest decliner in the S&P 500. The stock slid $1.58 to $13.73. Perrigo lost $7.12, or 8.5 per cent, to $76.53. Mallinckrodt tumbled $4.29, or 8 per cent, to $49.46.
UNAPPETIZING RESULTS: SuperValu slid 8.4 per cent after the grocery store operator announced a weak third-quarter profit, partly because of falling food prices. The stock shed 40 cents to $4.39.
SALES SLUMP: Signet Jewelers slid 3.7 per cent after the company cut its profit forecast for the fourth quarter and current fiscal year. Signet said its total sales fell 5 per cent over the holidays, citing technical problems at its e-commerce business. The stock fell $3.25 to $84.21.
DISAPPOINTING FORECAST: Auto parts supplier BorgWarner was down 2.8 per cent after it issued a profit and sales forecast that fell short of what Wall Street was anticipating. The stock shed $1.13 to $39.64.
FASTER IS BETTER: Drugmaker Merck rose 2.2 per cent on news that the Food and Drug Administration will do a quick review of one of the company’s drugs for its potential to treat a type of lung cancer. The stock added $1.31 at $61.23.
HEALTHY OUTLOOK: Intuitive Surgical gained 1.6 per cent after the robotic surgical systems maker delivered a strong fourth-quarter sales forecast. The stock rose $10.77 to $672.97.
EARNINGS SEASON: Big U.S. companies start reporting fourth-quarter earnings this week. On Friday JPMorgan Chase, Wells Fargo and Bank of America release their results. Still, investors had their eye on a few companies that released quarterly results Wednesday.
MARKETS OVERSEAS: Germany’s DAX was up 0.5 per cent, while France’s CAC 40 was essentially flat. Britain’s FTSE 100 was up 0.2 per cent. In Asia, a strong earnings forecast from Samsung Electronics helped drive gains on the South Korean stock market, where the Kospi added 1.5 per cent and hit its highest close in over a year. Japan’s benchmark Nikkei 225 rose 0.3 per cent. Australia’s S&P/ASX 200 added 0.2 per cent. Hong Kong’s Hang Seng gained 0.8 per cent.
ENERGY: Benchmark U.S. crude was up $1.23, or 2.4 per cent, at $52.05 a barrel in New York, having lost $1.14 the day before. Brent crude, which is used to price oil sold internationally, was up $1.28, or 2.4 per cent, at $54.92 a barrel in London.
BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.36 per cent from 2.38 per cent late Tuesday.
CURRENCIES: The pound continued to weaken amid concern that Britain might break off completely from the European Union’s single market. The currency was trading at $1.2066, down from $1.2163 the day before. The dollar rose to 116.61 yen from 115.73 yen late Tuesday. The euro fell to $1.0476 from $1.0560.
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