Tech stocks lead US indexes higher; hospitals, insurers sink | iNFOnews | Thompson-Okanagan's News Source

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Tech stocks lead US indexes higher; hospitals, insurers sink

FILE - This Dec. 21, 2016, file photo shows the New York Stock Exchange. A strong forecast from PC and printer maker HP is helping technology companies higher Friday, Oct. 13, 2017, as U.S. stock indexes make small gains. Retailers are also up after the Commerce Department said Americans shopped more in September. (AP Photo/Mark Lennihan, File)
October 13, 2017 - 12:17 PM

NEW YORK - A strong forecast from PC and printer maker HP is helping technology companies Friday as U.S. stock indexes approach record highs again. Retailers are also up after the Commerce Department said Americans shopped more in September. Health insurers and hospital operators are skidding after President Donald Trump said he will stop government payments to insurance companies under the Affordable Care Act.

KEEPING SCORE: The Standard & Poor's 500 index added 5 points, or 0.2 per cent, to 2,555 as of 3:05 p.m. Eastern time. The Dow Jones industrial average picked up 47 points, or 0.2 per cent, to 22,888. The Nasdaq composite gained 20 points, or 0.3 per cent, to 6,611. The Russell 2000 index of smaller-company stocks remained at 1,505.

HEALTH SCARE: The White House said late Thursday that it is stopping subsidy payments to insurers under the 2010 health care law. Those payments help reduce copays and deductibles for people with lower incomes. The move could reduce payments to hospitals and raise costs for insurers. Adding to the uncertainty, the sign-up period for subsidized private insurance starts Nov. 1.

Medicaid program administrator Centene lost $3.23, or 3.4 per cent, to $90.45 and insurer Anthem gave up $5.36, or 2.8 per cent, to $184.38. Hospital operator Tenet dropped 70 cents, or 5.1 per cent, to $13.16 and ambulatory surgery centre operator Envision Healthcare fell 86 cents, or 3.3 per cent, to $40.79.

SHHH: Third-quarter results are pouring in, but investors haven't reacted much so far. Sean Lynch, the co-head of global equity strategy for Wells Fargo Investment Institute, said that unless this batch of corporate reports is surprisingly good, stocks won't rise much further.

"If we come in at expectations or slightly above, I think markets maintain these gains," he said. But if that doesn't happen, Lynch said the S&P 500 could decline four or five per cent by the end of the year. That's not a huge loss, but stocks haven't fallen that much since early 2016.

Wells Fargo fell $1.81, or 3.3 per cent, to $53.40 after its third-quarter results came up far short of analyst estimates as its legal expenses rose.

Bank of America rose 47 cents, or 1.8 per cent, to $25.92 after its report.

TECH GAINS: HP forecast an adjusted profit of $1.74 to $1.84 a share in its next fiscal year, which is better than Wall Street expected, and also said it will return at least 50 per cent of its free cash flow to shareholders by paying dividends or buying back stock.

HP stock gained $1.57, or 7.7 per cent, to $21.97. Elsewhere, Facebook rose $1.38 to $173.93 and Apple added $1.16 to $157.16.

SHOPPING DIDN'T DROP: The Commerce Department said retail sales grew 1.6 per cent in September after a small decline in August. Much of the gain came from car and gasoline sales: sales of cars jumped as people living in the Southeast and Gulf Coast replaced vehicles that were destroyed by hurricanes Harvey and Irma, while gas prices increased due to temporary shortages in those areas. But other sales also grew by a solid amount.

Tiffany jumped $2.46, or 2.7 per cent, to $94.54 and home improvement retailer Lowe's rose 89 cents, or 1.1 per cent, to $82.46. Other consumer-focused companies rose as well. Travel website Expedia gained $2.11, or 1.4 per cent, to $150.09 and streaming video company Netflix added $3.48, or 1.8 per cent, to $199.35.

METALS CLIMB: Materials companies rose with metals prices. Gold gained $8.10 to $1,304.60 an ounce. Silver climbed 15 cents to $17.41 an ounce. Copper rose 1 cent to $3.13 a pound.

Steel prices climbed after Bloomberg News reported that China imported a record amount of iron ore in September and exported less steel. That sent prices higher. U.S. Steel climbed $1.85, or 7.2 per cent, to $27.41 and AK Steel added 27 cents, or 4.9 per cent, to $5.76.

PG&E WOES: Utility PG&E continued to tumble as investors wondered if the company will face stiff fines connected to the California wildfires. Officials said Thursday they are investigating the possibility that downed power lines or other faulty equipment touched off the fires. The stock dropped 6.7 per cent Thursday and fell another $6.58, or 10.2 per cent, to $57.92 on Friday.

Citi Investment Research analyst Praful Mehta said the company lost $2.2 billion in value Thursday, and even if PG&E were found responsible and grossly negligent for the fires, it probably wouldn't be fined much more than that.

The fires have killed 31 people and destroyed at least 3,500 homes and businesses since Sunday, and they are expected to become the deadliest and most destructive in California history.

GRAB A TWINKIE FOR THE ROAD: Hostess Brands slumped after President and CEO Bill Toler said he will resign by March 1. He will remain a member of the company's board. Another top executive, Chief Operating Officer Stuart Wilcox, left the company in August. The stock gave up $1.44, or 10.8 per cent, to $11.99.

ENERGY: Energy companies rose along with oil prices. Benchmark U.S. crude oil picked up 85 cents, or 1.7 per cent, to $51.45 a barrel in New York. Brent crude, used to price international oils, gained 92 cents, or 1.6 per cent, to $57.17 a barrel in London.

Wholesale gasoline rose 4 cents to $1.62 a gallon. Heating oil added 3 cents to $1.80 a gallon. Natural gas edged up 1 cent to $3 per 1,000 cubic feet.

BONDS: Bond prices rose. The yield on the 10-year Treasury note declined to 2.28 per cent from 2.32 per cent.

CURRENCIES: The dollar fell to 111.89 yen from 112.22 yen. The euro dipped to $1.1817 from $1.1836.

OVERSEAS: The DAX in Germany rose 0.1 per cent while the FTSE 100 index in Britain lost 0.3 per cent. The French CAC 40 fell 0.2 per cent. Japan's Nikkei 225 rose 1 while South Korea's Kospi lost 0.1 per cent. In Hong Kong, the Hang Seng added 0.1 per cent.


AP Markets Writer Marley Jay can be reached at His work can be found at

News from © The Associated Press, 2017
The Associated Press

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