News World News

Saturday 23 June 2018

Banks and healthcare firms lead drops on US market

The Dow Jones industrial average slid 218.55 points to 24,189.45.

The Dow Jones Industrial Average fell on Wednesday (Martin Keene/PA)
The Dow Jones Industrial Average fell on Wednesday (Martin Keene/PA)

By Associated Press reporter

Companies including banks and technology and healthcare firms fell on Wednesday after US stocks had surged the day before.

Oil prices hit a three-year high after President Donald trump tweeted that the US will launch missiles at targets in Syria.

Other than energy companies, stocks were slightly lower for most of the day.

Banks slipped along with interest rates while healthcare and technology companies gave up some of the big gains they made on Tuesday.

Mr Trump said the US will respond to the recent suspected chemical attack and Saudi Arabia said it intercepted missiles fired by rebels in Yemen. Fighting in the Middle East could restrict oil supplies and push prices higher.

Simona Mocuta, senior economist for State Street Global Advisors, said it is a challenge for investors to respond to events like possible strikes in Syria because it is not clear what the outcomes will be.

“There is so much uncertainty about the geopolitics that it’s hard for the market even to price on a day-to-day basis,” she said.

The S&P 500 index fell 14.68 points, or 0.6%, to 2,642.19 after it surged 1.7% on Tuesday. The Dow Jones industrial average slid 218.55 points, or 0.9%, to 24,189.45.

The Nasdaq composite lost 25.27 points, or 0.4%, to 7,069.03. However, the Russell 2000 index of smaller-company stocks rose 3.36 points, or 0.2%, to 1,546.70, and most of the stocks on the New York Stock Exchange finished higher.

Facebook stock continued to rise as CEO Mark Zuckerberg testified before Congress for a second day.

It rose 0.8% to 166.32 US dollars (£117.31) on Wednesday after a jump of 4.5% on Tuesday, its biggest gain in two years.

Facebook’s stock is still down 10% since the Cambridge Analytica privacy scandal broke in mid-March.

Other social media companies also rallied over the past two days. Snap, the parent of Snapchat, rose 2.2% to 14.80 dollars (£10.43). Twitter slipped 0.5% to 29.39 dollars (£20.73) after a 5.4% gain on Tuesday.

Energy companies rose as benchmark US crude climbed two per cent to 66.82 dollars (£47.13) a barrel in New York.

Brent crude, used to price international oils, gained 1.4% to 72.06 dollars (£50.82) a barrel in London.

Oil prices jumped more than three per cent on Tuesday as investors got more optimistic about a possible resolution to the US-China trade spat.

Overseas markets mostly fell following their gains the day before.

Germany’s DAX lost 0.8% and the CAC 40 in France dropped 0.6%. Britain’s FTSE 100 edged 0.1% lower.

Japan’s Nikkei 225 stock index lost 0.5% and the Kospi in South Korea declined 0.3%. Hong Kong’s Hang Seng climbed 0.6%.

The yield on the 10-year Treasury note fell to 2.78% from 2.80%. That put pressure on banks.

When bond yields fall, it forces interest rates on mortgages and other kinds of loans lower, meaning lower profits for banks. JPMorgan Chase fell 1.7% to 110.62 dollars (£78.02) and Bank of America declined 1.9% to 29.90 dollars (£21.08).

Medical and security imaging equipment maker Analogic agreed to be bought by Altaris Capital Partners for 84 dollars (£59.24) a share, or 1.05 billion dollars (£740 million).

That was much less than investors had hoped for and the stock dropped 13.2% to 83.35 dollars (£58.78).

Analogic spiked from about 84 dollars (£59.24) in March to as much as 96 dollars (£67.71) a share Tuesday.

Analogic noted that the stock price was lower than that when the company announced it would consider a sale.

Press Association

Today's news headlines, directly to your inbox every morning.

Editors Choice

Also in World News