Stocks end little changed; investors buy safe picks after weak jobs report
U.S. stocks ended pretty much where they started Thursday after spending the day cycling up and down. Investors bought safe picks such as phone companies and food makers after a surprisingly weak report on the job market.
Stocks started the day higher. Materials companies climbed after agricultural giant Monsanto soared on reports that it might be acquired. The market turned lower as investors worried about a Labor Department report that showed an unexpected jump in the number of people seeking unemployment benefits. Oil finished higher for the sixth time in seven days.
“The market is following oil,” said John Cannally, chief economic strategist for LPL Financial. Cannally thinks investors don’t have a lot of confidence in the global economy right now and will be watching reports out of China to see if there are more signs that the world’s second-largest economy is continuing to slow.
The Dow Jones industrial average edged up 9.38 points, less than 0.1%, to 17,720.50. The Standard & Poor’s 500 index slipped 0.35 of a point to 2,064.11. The Nasdaq composite index fell 23.35 points, or 0.5%, to 4,737.33.
The Labor Department said first-time applications for unemployment benefits rose to their highest level since February 2015. That comes after a disappointing jobs report for April. Applications rose by 20,000 to reach 294,000. Still, they have stayed below 300,000 for more than a year.
The biggest gains went to phone companies, chemicals makers and consumer stocks. AT&T increased 0.9% to $39.55 and Kraft Heinz rose 1.3% to $86.34. Coca-Cola advanced 0.8% to $45.83.
Monsanto led materials companies higher, jumping 8.4% to $97.92, after Bloomberg News reported that German chemical and pharmaceutical company Bayer might make an offer for it. That follows a wave of consolidation in the chemicals industry: DuPont and Dow Chemical agreed to combine last year, and ChemChina agreed to buy Syngenta of Switzerland in March.
Benchmark U.S. oil, which is at its highest price since early November, rose 47 cents, or 1%, to $46.70 a barrel in New York. Brent crude, the benchmark for international oil prices, rose 48 cents, or 1%, to $48.08 a barrel in London.
The International Energy Agency predicted that the global oil surplus would shrink by year’s end, bringing supply and demand much closer to balance. The price of oil had dropped from about $100 a barrel in mid-2014 to as low as $26 a barrel in February.
Department store Kohl’s sank 9.2% to $35.15 after reporting that its sales dropped and its income was weighed down by high costs. The company’s results suffered as it discounted some items to clear out inventory.
Retailers have been struggling for months. Macy’s slashed its profit forecast Wednesday following its quarterly report, and Gap posted worse-than-expected April sales Monday.
Apple fell to its lowest price in almost two years, sliding 2.3% to $90.34.
Biotech drug companies slumped on continued scrutiny of their pricing policies. Valeant Pharmaceuticals International fell on reports the company has not lowered prices on some of its medications, something it said it would do earlier this year. The stock fell 5.4%, to $24.93. Botox maker Allergan fell 3% to $216.02 and multiple sclerosis treatment maker Biogen declined 1.7% to $262.71. UnitedHealth, the largest U.S. health insurer, slipped 0.7% to $129.74 and Aetna slid 3.3%, to $108.60.
Data security company Infoblox surged 24.4% to $19.04 after Bloomberg reported that a private equity firm offered to buy it.
Burger chain Jack in the Box reported strong results, including better sales at its Qdoba Mexican restaurants. Its stock jumped 15.2% to $75.02.
Payment card company CPI Card Group reported disappointing results as shipments of chip-enabled cards were lower than expected. The company said the market was struggling in the U.S. and cut its guidance because credit card companies aren’t buying and issuing as many of the cards as expected.
CPI’s stock skidded 47.7% to $4.01. The company’s IPO priced at $10 per share in October.
Wholesale gasoline was little changed at $1.58 a gallon. Heating oil was nearly flat at $1.39 a gallon. Natural gas fell 2 cents to $2.16 per 1,000 cubic feet.
The price of gold slipped $4.30 to $1,271.20 an ounce. Silver fell 22 cents, or 1.2%, to $17.10 an ounce. Copper fell 3 cents, or 1.4%, to $2.07 a pound.
Germany’s DAX fell 1.1% and the FTSE 100 in Britain was down 0.4%. France’s CAC 40 lost 0.2%. Japan’s Nikkei 225 stock index rose 0.4% and the Hang Seng index of Hong Kong dropped 0.7%. South Korea’s Kospi lost 0.1%.
Bond prices fell and the yield on the 10-year U.S. Treasury note rose to 1.75% from 1.73%. The dollar edged up to 109.14 yen from 108.49 yen. The euro slipped to $1.1373 from $1.1425.
UPDATES:
2:28 p.m.: This article was updated with additional information.
1:21 p.m.: This article was updated with closing prices.
This article was originally published at 9:56 a.m.
