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Stocks recover from sharp early drop, finishing mixed

FILE- This April 5, 2018, file photo shows the facade of the New York Stock Exchange. The U.S. stock
Most of the companies listed on the New York Stock Exchange closed higher Monday.
(Richard Drew / Associated Press)

U.S. stocks shrugged off early losses and wound up with a mixed finish Monday. Household goods companies took some of the worst losses as the Standard & Poor’s 500 index fell for the third time in four days.

The S&P 500 dropped as much as 22 points early in the day. Consumer products and packaged foods companies stumbled, and drugmakers and distributors fell, as did health insurers. That came after indexes in Europe and Asia fell. German stocks took steep losses as investors wondered if a dispute over migrants could eventually threaten the German government.

But U.S. stocks gradually recovered most of their losses as energy companies rose along with oil prices and technology companies managed to make some gains. Smaller and more U.S.-focused companies climbed. That continued a pattern that has persisted for more than three months.

It’s been a turbulent few months for stocks, but the benchmark S&P 500 is a bit higher than it was when international trade tensions started to weigh on the market in late February. Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, said it’s a good sign that some sectors that have struggled are now doing better.

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“It’s indicative of a market that’s unconvinced that a trade war will develop,” he said. Still, he said the next month of trading could be choppy as investors analyze the latest trade developments and wait for companies to start reporting their second-quarter results in mid-July.

The S&P 500 fell 5.91 points, or 0.2%, to 2,773.75. The Dow Jones industrial average declined 103.01 points, or 0.4%, to 24,987.47. The Nasdaq composite edged up 0.65 of a point to 7,747.03.

The Russell 2000 index rose 8.55 points, or 0.5%, to a record 1,692.46. Many investors feel the smaller and more U.S.-focused companies in that index are less vulnerable in the event that a major trade dispute slows growth in the global economy. Most of the companies listed on the New York Stock Exchange closed higher.

Biogen sank 5.2% to $289.12 — the biggest fall of any S&P 500 company — after the drugmaker’s competitor released positive clinical trial results. PTC Therapeutics jumped 27.5% to $47.88 after its report from an early study of a drug intended to treat Type 1 spinal muscular atrophy, a genetic disorder that affects infants. PTC’s drug could affect sales of Biogen’s Spinraza. Biogen’s partner, Ionis Pharmaceuticals, sank 6.4% to $43.61.

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Volkswagen slumped after German authorities detained Rupert Stadler, chief executive of its Audi division, in an extension of the emissions scandal that has rocked Volkswagen since 2015. That scandal has led to billions of dollars in fines, the arrest of executives and the indictment in the United States of VW’s former CEO. Volkswagen stock fell 3.1% in Germany.

The German DAX sank 1.4%, and all 30 stocks on the index ended with losses. The CAC 40 in France slid 0.9%. Britain’s FTSE 100 edged down less than 0.1%. Japan’s benchmark Nikkei 225 index fell 0.8%, and South Korea’s Kospi lost 1.2%. Markets in Hong Kong were closed for a holiday.

On Saturday the Trump administration launched an investigation into whether tariffs are needed on automobiles imported to the United States as talks with Canada and Mexico over the North American Free Trade Agreement stalled. A day earlier, President Trump said that starting in July, the U.S. will put tariffs of up to 25% on some Chinese imports. Those tariffs target industrial and agricultural machinery, aerospace parts and communications technology. China said it will raise import duties on $34 billion worth of American goods, including soybeans, electric cars and whiskey.

Alphabet, Google’s parent company, rose 2.1% to $1,183.58 after it agreed to invest $550 million in Chinese e-commerce company JD.com. JD.com edged up 0.4% to $43.76.

Rent-A-Center jumped 22% to $14.68 after private equity firm Vintage Capital Management agreed to buy it for $15 a share, or $800 million. Rent-A-Center leases household goods on a rent-to-own basis.

Clothing company Perry Ellis fell 2.7% to $27.22 after founder George Feldenkreis started buying more stock to take the company private in a deal worth $27.50 a share, or $437 million.

Oil futures rose as investors wait for an OPEC meeting later this week. Benchmark U.S. crude climbed 1.2% to $65.85 a barrel in New York. Brent crude, used to price international oils, climbed 2.6% to $75.34 a barrel in London.

Chevron shares rose 1.6% to $125.97. ConocoPhillips rose 1.9% to $66.60.

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Wholesale gasoline rose 1.6% to $2.05 a gallon. Heating oil jumped 2.1% to $2.13 a gallon. Natural gas sank 2.3% to $2.95 per 1,000 cubic feet.

Bond prices were little changed. The yield on the 10-year Treasury note stayed at 2.92%.

Gold rose 0.1% to $1,280.10 an ounce. Silver slipped 0.2% to $16.44 an ounce. Copper fell 1.2% to $3.11 a pound.

The dollar fell to 110.44 yen from 110.62 yen. The euro inched up to $1.1615 from $1.1607.


UPDATES:

3:40 p.m.: This article was updated with closing prices, context and analyst comment.

This article was originally published at 8:35 a.m.


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