U. S. stocks are mixed Wednesday as the price of oil rises to a three-year high but banks decline along with interest rates. Stocks rallied a day earlier on signs the trade tensions between the U. S. and China were easing. Facebook stock continues to rise as CEO Mark Zuckerberg testifies to Congress.
U. S. stocks are mixed Wednesday as the price of oil rose to a three-year high but banks declined along with interest rates. Stocks rallied a day earlier on signs the trade tensions between the U. S. and China were easing. Facebook stock continues to rise as CEO Mark Zuckerberg testifies to Congress about the company’s data privacy scandal.
KEEPING SCORE: The Standard & Poor’s 500 index fell 5 points, or 0.2%, to 2,651 as of 1 p.m. Eastern time after it surged 1.7% on Tuesday. The Dow Jones industrial average slid 124 points, or 0.5%, to 24,283. The Nasdaq composite held steady at 7,094 points. The Russell 2000 index of smaller-company stocks rose 4 points, or 0.3%, to 1,548.
ENERGY: Energy companies kept rising as the price of oil jumped to a three-year high. Benchmark U. S. crude climbed $1.66, or 2.5%, to $67.17 a barrel in New York. Brent crude, used to price international oils, rose $1.52, or 2.1%, to $72.56 a barrel in London.
Oil prices jumped more than 3% on Tuesday as investors got more optimistic about a possible resolution to the U. S.-China trade spat. If those talks deteriorate and the countries cut back on trade with each other, it could impede global economic growth and reduce demand for oil.
FACEBOOK FACES CONGRESS: Facebook rose 0.7% to $166.23 as Zuckerberg testified before members of Congress for a second day. Facebook surged Tuesday during the first part of the CEO’s testimony and finished the day with a gain of 4.5%, its biggest one-day jump in almost two years.
Daniel Ives, head of technology research for GBH Insights, said there are two reasons for Facebook’s rally. One is that Zuckerberg has done well in his testimony, which investors weren’t sure would happen. The other is that Wall Street feels many members of Congress haven’t been very tough on Facebook, so they’re not worrying as much that the lawmakers will crack down on it and other technology companies.
“A lot of the regulators and politicians don’t really understand Facebook and its [business] model, so how can you expect that regulation is going to be a near-term issue?” he said. “The political theater and grandstanding has actually worked to the benefit of Facebook and Zuckerberg rather than to its detriment.”
The stock is still down about 10% since the Cambridge Analytica privacy scandal broke in mid-March.
Other social media companies have rallied too. Snap, the parent of Snapchat, rose 2.4% to $14.83. Twitter slipped 1.2% to $29.17 after Tuesday’s 5.4% jump.
LOSING GROUND: As investors looked for safer investments, real estate investment trusts and household goods makers rose, and bond prices climbed. The yield on the 10-year Treasury note fell to 2.78% from 2.80%.
The lower bond yields put pressure on banks. When bond yields fall, it forces down interest rates on mortgages and other kinds of loans, meaning lower profits for banks. JPMorgan Chase shares fell 1.2% to $111.15. Bank of America stock declined 1.6% to $29.99.
DEAL DISAPPOINTMENT: Medical and security imaging equipment maker Analogic agreed to be bought by Altaris Capital Partners for $84 a share, or $1.05 billion. That was much less than investors had hoped for, and the stock dropped 13% to $83.55. It spiked from about $84 in March to as much as $96 a share Tuesday on reports the company might be acquired. Analogic noted that its stock was trading at $67 a share in June, when it said it would consider a sale and other options.
EYE ON POLITICS: President Trump tweeted that the United States will launch missiles at targets in Syria in response to the recent suspected chemical attack in a rebel-held area that killed at least 40 people. He also tweeted shots at Deputy Atty. Gen. Rod Rosenstein and complained about the Russia investigation.
Trump reportedly was so angry about the FBI raid of his personal attorney’s office and hotel room that he is considering firing Rosenstein and special counsel Robert S. Mueller III.Firing either or both could set off a political firestorm with unclear effects for the Trump administration’s agenda, and although the market has mostly overlooked that kind of political turmoil since Trump took office, it has showed signs of concern about the uncertainty those steps could create.
PRICES PICK UP: U. S. consumer prices rose 2.4% in March from a year earlier. If food and energy prices are excluded, prices have risen 2.1%. That could be a sign of rising inflation, a possibility that has worried investors in recent months. However, the increase also reflects the fact that it’s been more than a year since several mobile phone companies introduced unlimited data plans. That kept consumer prices down over the past 12 months.
CURRENCIES: The dollar fell to 106.70 yen from 107.17 yen. The euro rose to $1.2385 from $1.2361.
OVERSEAS MARKETS: Germany’s DAX dropped 0.8%. The CAC 40 in France fell 0.6%. Britain’s FTSE 100 edged down 0.1%.
Japan’s Nikkei 225 stock index lost 0.5%, and the Kospi in South Korea declined 0.3%. Hong Kong’s Hang Seng climbed 0.6%.
