Wednesday September 26th, 2018 5:00AM

US stocks higher as banks and technology companies rebound

By The Associated Press
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NEW YORK (AP) — U.S. stocks are rising Thursday as technology companies and banks advance. European stocks are climbing after the European Central Bank said it will begin gradually reducing the bond purchases it's been making to strengthen the regional economy. The market is regaining a chunk of the previous day's losses following a round of improved company earnings, but drugmakers are skidding.

KEEPING SCORE: The Standard & Poor's 500 index rose 4 points, or 0.2 percent, to 2,561 as of 3:30 p.m. Eastern time. The Dow Jones industrial average gained 88 points, or 0.4 percent, to 23,417. The Nasdaq composite lost 3 points, or 0.1 percent, to 6,650 as health care companies declined. The Russell 2000 index of smaller-company stocks added 3 points, or 0.2 percent, to 1,496.

BONDS: Bond prices edged lower. The yield on the 10-year Treasury note rose to 2.45 percent from 2.44 percent as yields and interest rates remained at seven-month highs. Banks had fallen with the rest of the market on Wednesday in spite of a jump in bond yields, but higher rates mean banks can make larger profits from mortgages and other lending.

JPMorgan Chase rose 98 cents, or 1 percent, to $101.99 and Northern Trust gained $1.02, or 1.1 percent, to $95.78.

I'M OK, EURO-K: Investors were pleased with the European Central Bank's actions. The bank said it will cut its bond purchases in half, to 30 billion euros a month, starting in January. But it plans to continue making those purchases until at least September and could increase them again if the regional economy runs into trouble. France's CAC-40 jumped 1.5 percent and the DAX in Germany gained 1.4 percent. Britain's FTSE 100 added 0.5 percent.

The euro fell to $1.1657 from $1.1807 as investors think interest rates in Europe will stay lower for longer than they had expected. The weaker euro is good news for companies that export goods from Europe to other areas.

THE QUOTE: Scott Wren, senior global equity strategist for Wells Fargo Investment Institute, said investors were relieved the bank did not announce a bigger cut in bond purchases or take more aggressive steps.

"The market was a little bit fearful that the ECB was going to be more hawkish," he said. "That wasn't the case."

Still, Wren said the ECB and the Federal Reserve might both end up raising interest rates further and faster than investors currently expect. Concerns about higher interest rates helped push stocks lower on Wednesday and Wren said the same fears could have a big effect on stocks in 2018.

"The market should be worried about the Fed raising rates three times next year like they've hinted, even though the market hasn't believed that," he said.

FRIGHTENING FORECAST: Drugmaker Celgene plunged after it reduced its forecasts for this year, partly because it expects weaker sales of its critically important new psoriasis treatment Otezla. Celgene also said it won't meet its longer-term goals: it cut its profit and sales projections for the year 2020 as it anticipates weaker sales of new products and medications to treat cancer and inflammation. It now expects $19 billion to $20 billion in revenue that year, below its previous target of at least $21 billion.

Celgene stock lost $24.51, or 20.5 percent, to $95.03. Bristol-Myers Squibb lost $3.27, or 5.1 percent, to $60.73 after it reduced its annual forecast. Competitor Amgen fell $2.07, or 1.2 percent, to $175.43.

MATERIAL WORLD: Materials companies also climbed after a round of strong company results. Dow DuPont jumped $2.14, or 3 percent, to $73.23 and Air Products and Chemicals, which sells gases for industrial, medical and other uses, gained $6.51, or 4.2 percent, to $161.10.

OPIOID CRISIS: Drugstores and prescription drug distributors sank following President Donald Trump's remarks about the opioid crisis. He described it as a national public health emergency and said companies that are considered "bad actors" could be sued. He did not detail how that determination might be made.

CVS Health tumbled $3.08, or 4.1 percent, to $72.46 and Walgreens fell $2.32, or 3.3 percent, to $67.04. Prescription drug distributors had made strong gains earlier in the day after solid results from McKesson, but in afternoon trading McKesson dropped $4.57, or 3 percent, to $146.81 and AmerisourceBergen shed $3.74, or 4.5 percent, to $78.48. Cardinal Health lost $2.12, or 3.2 percent, to $64.93.

ENERGY: Benchmark U.S. crude added $52.64 a gallon in New York. Brent crude, used to price international oils, rose 86 cents, or 1.5 percent, to $59.30 a barrel in London.

Wholesale gasoline rose 2 cents to $1.75 a gallon. Heating oil picked up 2 cents to $1.84 a gallon. Natural gas fell 3 cents to $2.89 per 1,000 cubic feet.

METALS: Gold gave up $9.40 to $1,269.60 an ounce. Silver fell 11 cents to $16.81 an ounce. Copper lost 1 cent to $3.18 a pound.

ASIA: Japan's benchmark Nikkei 225 index edged 0.2 percent higher while South Korea's Kospi dipped 0.5 percent. The Hang Seng in Hong Kong slipped 0.4 percent.

The dollar rose to 114 yen from 113.72 yen.


AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jay

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy, AP Business - Financial Markets, AP Business - Industries, AP Business - Health Care
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