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Stocks end flat: Plunging oil prices hurt energy firms, but other sectors edge up

The U.S. flag flies above the Wall Street entrance to the New York Stock Exchange.
The U.S. flag flies above the Wall Street entrance to the New York Stock Exchange.
(Richard Drew / Associated Press)

Oil prices and energy companies plunged Thursday, but other stocks didn’t move much as investors waited for more signs about the state of the economy.

Household goods makers and healthcare companies rose after some solid company earnings reports. Most other parts of the market made little gains, but energy companies took sharp losses as the price of crude oil fell almost 5% — its biggest one-day loss in about two months.

“We may be seeing signs that global production is strong, and whenever markets see a decline in oil prices they worry it’s actually an indication of weak demand,” said Kate Warne, an investment strategist for Edward Jones.

Warne said oil prices have slipped recently because of an accumulation of concerns about rising energy production in the U.S. and slower economic growth in both the U.S. and China.

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Healthcare stocks didn’t react much to the narrow passage in the House of Representatives of a bill intended to roll back much of former President Obama’s signature healthcare law. The bill now heads to the Senate, where its fate is less certain.

Broader market measures did tick up after the bill was passed, however, as investors hoped that the Republican-controlled Congress may be in a better position to compromise on business-friendly policies such as tax cuts.

The Standard & Poor’s 500 index rose 1.39 points, or 0.1%, to 2,389.52. The Dow Jones industrial average fell 6.43 points to 20,951.47. The Nasdaq composite rose 2.79 points to 6,075.34. The Russell 2000 index of small-company stocks slipped 2.08 points, or 0.1%, to 1,388.85. On the New York Stock Exchange, two out of every three stocks fell.

U.S. benchmark crude futures sank $2.30, or 4.8%, to $45.52 a barrel. Brent crude, the standard for international oils, slid $2.41, or 4.7%, to $48.38 a barrel in London. Oil has fallen to its lowest price since November as investors wonder if the OPEC cartel will extend an agreement to cut production and support prices. OPEC nations will discuss that deal this month.

Exxon Mobil fell 1.3% to $81.64, EOG Resources slid 3.4% to $88.60 and Chesapeake Energy tumbled 7.4% to $5.13.

Other parts of the market were quiet. The federal government is set to release its monthly jobs report Friday morning, and Warne said the April report may get an outsize level of attention because the previous jobs report was disappointing and the economy didn’t grow much in the first quarter.

“A strong jobs report for April would suggest that the first quarter’s weakness was transitory,” she said.

Church & Dwight, which makes Arm & Hammer baking soda, Trojan condoms and OxiClean cleaners, climbed 4.3% to $50.85 after it posted first-quarter results that beat analysts’ expectations and raised its profit estimate.

Kellogg, the maker of Frosted Flakes and Pop Tarts, rose 2.1% to $70.40 after it posted a larger profit than expected.

Fitbit leaped 12.2% to $6.37 after the maker of wearable fitness trackers reported stronger first-quarter results than expected.

Square climbed 8.9% to $19.90 after the mobile payments company posted quarterly results that beat expectations.

Tesla sank 5% to $295.46 after the maker of electric cars reported a deepening loss for the first quarter.

Bond prices dropped for the second day in a row. The yield on the 10-year Treasury note rose to 2.35% from 2.32%. That helped bank stocks because higher interest rates enable banks to make bigger profits on loans.

On Wednesday the Federal Reserve left interest rates unchanged, but said it expects the economy to recover from its sluggish first-quarter growth. That’s helping bond yields and the dollar because it’s a hint that the central bank expects to raise rates again soon.

Telecommunications companies slumped after Level 3 Communications and CenturyLink both issued disappointing first-quarter results. Level 3 stock declined 4.3% to $57.81. CenturyLink dropped 6.6% to $23.74.

Wholesale gasoline fell 5 cents, or 3.4%, to $1.48 a gallon. Heating oil fell 6 cents, or 4.2%, to $1.41 a gallon. Natural gas fell 4 cents to $3.19 per 1,000 cubic feet.

Precious metals prices dropped. Gold sank $19.90, or 1.6%, to $1,228.60 an ounce. Silver fell 24 cents, or 1.5%, to $16.30 an ounce. Copper fell 3 cents, or 1.3%, to $2.51 a pound.

The dollar slipped to 112.42 yen from 112.64 yen. The euro rose to $1.0981 from $1.0906.

The CAC 40 in France rose 1.3% after a debate between French presidential candidates Emmanuel Macron and Marine Le Pen. Macron has a large lead in the polls as Sunday’s vote nears. He is perceived to be more business-friendly and is an advocate of France’s continued use of the euro and membership of the European Union. That helped send the euro higher Thursday.

Germany’s DAX rose 1%, and the FTSE 100 index in Britain rose 0.2%.

The South Korean Kospi rose 1%. Hong Kong’s Hang Seng edged down 0.1%. Japan’s market remained closed for a holiday.


UPDATES:

2:30 p.m.: This article was updated with closing prices, context and analyst comment.

7:25 a.m.: This article was updated with market prices and context.

This article was originally published at 6:55 a.m.


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