Stocks fall as crude oil prices dive; bank shares climb
Major U.S. indexes closed mostly lower Monday as investors bought bank shares but sold most other types of stocks, including healthcare and technology companies’. Energy stocks sank along with oil prices.
Oil prices fell more than 4% after U.S. officials suggested the United States will take a softer stance on countries that import oil from Iran after sanctions on Iran’s energy sector go back into effect in November. Banks rose along with interest rates as well as a solid second-quarter report from Bank of America. A strong forecast gave Deutsche Bank its biggest gain in more than a year.
Amazon jumped midday as investors expected strong sales during the company’s annual Prime Day promotion, but the stock gave up much of that gain following problems with the company’s website. Most other groups of stocks lost ground, and about two-thirds of the companies on the New York Stock Exchange fell. Smaller companies fared the worst.
The Standard & Poor’s 500 index slipped 2.88 points, or 0.1%, to 2,798.43. The Dow Jones industrial average rose 44.95 points, or 0.2%, to 25,064 as Goldman Sachs, JPMorgan Chase, and Boeing climbed. The Nasdaq composite fell 20.26 points, or 0.3%, to 7,805.72.
The Russell 2000 index of smaller-company stocks declined 8.54 points, or 0.5%, to 1,678.54.
Stocks finished at five-month highs Friday as investors remained optimistic about the U.S. economy even as they worried about the trade war between the United States and China.
Bank of America climbed 4.3% to $29.78 after it reported that second-quarter profits jumped 33%, beating Wall Street estimates. Like other big banks, it got a big boost from the corporate tax cut that passed at the end of 2017 and from higher interest rates.
Deutsche Bank shares jumped 8% to $12.14 after it said its earnings will be considerably higher than analysts expected. Deutsche Bank has taken three years of losses based on high costs and big fines and penalties linked to past misconduct, and the stock is down 36% in 2018.
Benchmark U.S. crude fell 4.2% to $68.06 a barrel in New York. Brent crude, used to price international oils, fell 4.6% to $71.84 a barrel in London.
Treasury Secretary Steven T. Mnuchin and Secretary of State Michael R. Pompeo said countries and businesses that import oil from Iran could avoid penalties if they reduce those imports significantly. Recently, the U.S. government was pressuring countries to stop buying Iranian oil entirely. The United States will reinstitute sanctions on Iran’s energy sector in early November as a result of the U.S. withdrawal from the Iran nuclear deal.
Tribune Media and Sinclair Broadcast Group both nosedived after the Federal Communications Commission said it has concerns about Sinclair’s plan to buy Tribune. Right-leaning TV station operator Sinclair is the largest operator of local TV stations in the United States, and it has proposed selling some of its own TV stations as part of the $3.9-billion deal.
Tribune Media plunged 16.7% to $32.12. Sinclair skidded 11.7% to $29.10.
Online retail giant Amazon jumped as much as 1.6% at the start of its Prime Day promotion, but finished up 0.5% at $1,822.49. Still, Amazon is up 56% in 2018 and is responsible for about 19% of the total return of the S&P 500 over that time, according to S&P Dow Jones Indices.
Netflix rose 1.2% to $400.48 during the day, but it plunged 13.1% in aftermarket trading as its estimate for third-quarter subscriber growth fell short of analysts’ projections. The streaming video company’s share price has doubled this year, but if the late move is any indication, the stock could be on track for its biggest loss in two years Tuesday.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.85% from 2.83%. High-dividend companies such as real estate investment trusts fell as investors who wanted income bought bonds instead.
Arconic, a company that makes aluminum parts for companies in the aerospace and automobile industries, soared after the Wall Street Journal reported that private equity firms are interested in buying it. The stock climbed 10.5% to $19.20, giving Arconic a market value of about $9.3 billion. The stock has fallen almost 40% since mid-January.
Alliance Data Systems, which manages loyalty and rewards programs for retailers, fell 10.1% to $218.97 after it said late and delinquent payments increased in the second quarter.
Gold fell 0.1% to $1,239.70 an ounce. Silver stayed at $15.81 an ounce. Copper fell 0.4% to $2.76 a pound.
Wholesale gasoline skidded 5% to $2 a gallon. Heating oil dropped 3.7% to $2.05 a gallon. Natural gas rose 0.3% to $2.76 per 1,000 cubic feet.
The dollar stayed at 112.30 yen. The euro climbed to $1.1714 from $1.1677.
Germany’s DAX rose 0.2% while the CAC 40 in France fell 0.4% and the FTSE 100 index in Britain dropped 0.8%. Hong Kong’s Hang Seng edged up 0.1%. The Kospi in South Korea fell 0.4%.
2:20 p.m.: This article was updated with a late change in the Russell 2000’s closing level.
2:10 p.m.: This article was updated with closing prices and context.
This article was originally published at 11:35 a.m.
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