Stocks end slightly up; healthcare shares rise and energy firms fall
U.S. stocks finished just a bit higher Monday as gains for drug companies were almost canceled by sharp losses for metals and energy companies.
Coming off two weeks of losses, stocks traded in a narrow range. Drug company stocks, which have been under pressure recently over concerns they’ll have trouble raising prices for medicines, moved sharply higher. The energy market was shaken up and the price of oil fell as Saudi Arabia replaced its oil minister. Metals companies tumbled on renewed worries about China’s economy.
“The S&P 500 is kind of stuck in a range and it’s been in that range, really, since the middle of March,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab. After Friday’s weak jobs report and an uninspiring earnings season, Frederick thinks stocks will stay where they are for now.
The Dow Jones industrial average edged down 34.72 points, or 0.2%, to 17,705.91 as machinery maker Caterpillar and energy giant Chevron lost ground. The Standard & Poor’s 500 index picked up 1.55 points to 2,058.69. The Nasdaq composite index rose 14.05 points, or 0.3%, to 4,750.21.
Healthcare stocks, one of the worst-performing areas of the market this year, made a broad rally. Botox maker Allergan jumped 6% to $213.71 after reporting encouraging results from a late-stage clinical study of a treatment for uterine fibroids, a noncancerous growth in the uterus. Mallinckrodt, which has tumbled in recent months as investors worried about its ability to raise drug prices, climbed 6.1% to $59.85.
Healthcare real estate investment trust HCP rose 4.2% to $35.99 after a strong earnings report. Healthcare products giant Johnson & Johnson ticked up 0.9% to $113.72.
U.S. crude fell $1.22, or 2.7%, to $43.44 a barrel in New York. Brent crude, the benchmark for international oil prices, fell $1.74, or 3.8%, to $43.63 a barrel in London. Among energy companies, Chevron slid 1.5% to $100.35 and ConocoPhillips fell 2.6% to $41.65.
The energy market was unsettled after the government of Saudi Arabia replaced its longtime oil minister over the weekend. Ali al-Naimi had held that position for 20 years and was a powerful voice within OPEC. He was dismissed as the government plans a series of reforms that are intended to overhaul the kingdom’s economy as it deals with the effects of a steep drop in oil prices.
Reports showed that China’s exports fell 1.8% in April from a year earlier and imports plunged 10.9%. Both totals were weaker than analysts expected. China is a critical market for fuels and metals, and investors worried that the import and export data means demand is getting weaker.
“If the growth is slowing, that reduces the demand for all sorts of metals,” said Frederick. He added that the Chinese yuan has weakened recently and could fall further if the Federal Reserve raises interest rates soon.
Gold dropped $27.40, or 2.1%, to $1,266.60 an ounce and silver sank 44 cents, or 2.5%, to $17.09 an ounce. Copper fell five cents, or 2.2%, to $2.11 a pound.
Gold producer Newmont Mining dropped 6.7% to $31.83. Gold and copper miner Freeport-McMoRan dived 10.8% to $10.52 and aluminum producer Alcoa slid 5.8% to $9.46.
Krispy Kreme Doughnuts agreed to be taken private by coffee giant JAB Beech for about $1.35 billion, or $21 per share. The company’s board approved the sale and shareholders will vote on it in June. Krispy Kreme’s stock jumped 24.3% to $20.96.
LendingClub tumbled 34.9% to $4.62 after its chairman and CEO resigned. The company, an online marketplace that connects borrowers and investors, said Renaud Laplanche left after an internal review of the sale of $22 million in loans to an investor.
Meat producer Tyson Foods raised its annual forecasts after its second-quarter results surpassed Wall Street estimates. Its stock advanced 1.5% to $68.24. Competitor Hormel Foods rose 3.1% to $39.74.
CBS and Viacom slumped after a judge dismissed a case that challenged the mental competency of Sumner Redstone, who controls both companies. An ex-girlfriend had challenged the 92-year-old’s ability to make decisions about his medical care. Viacom fell 2.2% to $40.43 and CBS slid 2.9% to $56.
Germany’s DAX stock index jumped after figures showed factory orders climbed in March. February’s figures were also revised higher. The DAX advanced 1.1% and the CAC-40 in France rose 0.5%. The FTSE 100 index of leading British shares slipped 0.2%. The Shanghai Composite Index sank 2.8%. Seoul’s Kospi fell 0.4% and Tokyo’s Nikkei 225 advanced 0.7%.
Bond prices continued to rise. The yield on the 10-year U.S. Treasury note fell to 1.75% from 1.78% late Friday. The dollar rose to 108.48 yen from 107.13 yen. The euro slipped to $1.1389 from $1.1401.
UPDATES:
2:45 p.m.: This article was updated with additional information.
1:16 p.m.: This article was updated with closing prices.
This article was originally published at 7:43 a.m.
