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Stocks take a hit after FBI says it’s investigating new Clinton-related emails

The Dow Jones industrial average fell 77.46 points, or 0.4%, to 17,959.64.
The Dow Jones industrial average fell 77.46 points, or 0.4%, to 17,959.64.
(Seth Wenig / Associated Press)

An advance on the stock market Friday wilted after the FBI notified Congress that it would investigate newly discovered emails linked to Democratic presidential candidate Hillary Clinton.

The market had started out on a strong note after the government reported that the economy broke out of a slump in the third quarter and grew at the fastest pace in two years.

The early climb was led by industrial, energy and technology companies, which would stand to benefit most from a pickup in the economy, but gains disappeared after the FBI made its announcement around 1 p.m. Eastern time. Clinton has led in recent polls, and the surprise development added new uncertainty just a week and a half before the presidential election.

“I think the betting has to be that there’s nothing too damning, but we don’t know,” said Brad McMillan, chief investment officer for Commonwealth Financial Network.

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Read more: FBI says emails found in Anthony Weiner’s sexting scandal may have links to Clinton probe »

The Dow Jones industrial average closed down 8.49 points, less than 0.1%, at 18,161.19. The index was 80 points higher shortly before the new inquiry was disclosed, then went down as much as 74 points in the minutes that followed.

The Standard & Poor’s 500 index fell 6.63 points, or 0.3%, to 2,126.41. The Nasdaq composite slid 25.87 points, or 0.5%, to 5,190.10.

Healthcare companies took the biggest losses. Prescription drug distributor McKesson plunged 22.7% to $124.11, a three-year low, after its revenue fell about $1.5 billion short of estimates. The company slashed its annual outlook because of weaker drug prices, and investors worried that McKesson and its rivals will compete by making bigger cuts in prices.

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Competitor AmerisourceBergen sank 13% to $69.14, and Cardinal Health shed 9.8% to $67.50.

Drugmakers were pummeled on weak earnings. Amgen, the world’s largest biotech drug company, reported solid results for the third quarter and raised its guidance. However, the Thousand Oaks company also disclosed flat sales of the anti-inflammatory medication Enbrel, its top-selling drug. Enbrel soon will face more competition, which could hurt sales.

Amgen shares dropped 9.6% to $145.18. It was the stock’s worst one-day loss since October 2000. Drugmaker AbbVie disclosed weak sales and lost $3.86, or 6.3%, to $57.60.

Healthcare stocks are the worst-performing part of the market this year. They’re down 6%, while the S&P 500 is up 4%. Their performance compared with the rest of the market has gotten worse over the last few months.

Earlier, stocks rose after the economy grew faster than expected during the third quarter. The Commerce Department said exports grew and more businesses restocked their shelves. In total, gross domestic product grew 2.9%, which was better than economists expected. Growth had slowed late last year, causing worry among investors.

Read more: U.S. economy grows at its strongest pace in two years »

McMillan said he thinks the economy should keep growing at a similar pace for the next few quarters.

“We’re already seeing business and consumer confidence come back,” he said.

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General Electric rose 2.1% to $29.22, and oil and gas drilling services company Baker Hughes jumped 8.4% to $59.12 as the two firms discussed a possible deal. GE said that the discussions concern a partnership and that it doesn’t intend to buy Baker Hughes outright. Baker Hughes tried to merge with competitor Halliburton two years ago, but the companies walked away from the combination after the federal government sued to block it.

Other industrial stocks, including United Technologies, which makes products including jet engines and elevators, and manufacturer Honeywell, also traded higher.

Amazon sank 5.1% to $776.32 after its profit came up short of analysts’ estimates. The company also released a weak outlook. The stock was trading at all-time highs and has surged more than 30% over the last 12 months.

AB InBev fell 3.8% to $116.84 after the world’s largest beer maker cut its annual revenue forecast following weak results from its business in Brazil.

U.S. crude fell 2.1% to $48.70 a barrel, its lowest price this month. Brent crude, the international standard, fell 1.5% to $49.71 a barrel.

Bond prices edged higher. The yield on the 10-year Treasury note fell to 1.84% from 1.85%.

The dollar fell to 104.78 yen from 105.29 yen. The euro rose to $1.0982 from $1.0898.

Metals turned higher. The price of gold picked up $7.30 to $1,276.80 an ounce. Silver rose 16 cents to $17.80 an ounce. Copper advanced 3 cents to $2.19 a pound.

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In other energy trading, wholesale gasoline fell 2 cents to $1.47 a gallon. Heating oil gave up 3 cents to $1.54 a gallon. Natural gas rose 4 cents to $3.11 per 1,000 cubic feet.

Overseas, France’s CAC 40 rose 0.3%, and the FTSE 100 in Britain picked up 0.1%. Germany’s DAX edged down 0.2%. Japan’s benchmark Nikkei 225 gained 0.6%, and South Korea’s Kospi fell 0.2%. In Hong Kong, the Hang Seng lost 0.8%. 

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UPDATES:

2:20 p.m.: This article was updated with closing prices, analysis and additional market information. 

11:15 a.m.: This article was updated with information about the FBI’s inquiry into Hillary Clinton’s emails and with more recent prices. 

This article was originally published at 8 a.m.


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