US Markets Flat, Drops in Tech and Healthcare Offsets Oil Gains
US markets are basically flat today as high tech and health care stocks have slumped, but the continuing rebound in oil prices has given energy companies a lift. Investors have also resisted making big moves in recent days.
Thursday, August 18, 2016 - 00:00
In early afternoon trading, the Dow Jones industrial average was down 0.05% while the S&P 500 was up 0.09%. The Nasdaq also gained 0.17%.
The federal government said today that fewer people filed for unemployment benefits last week. A total of 262K new applications were filed. Applications for jobless benefits have remained below 300K a week for almost a year and a half, the longest streak since 1970. Applications are a proxy for layoffs, which have remained low as hiring has grown. The number of people receiving benefits is around 2.18M, down 4% over the last year.
In the tech sector, data storage company NetApp posted stronger results than analysts expected, helped by cost cuts, and the company’s stock surged 17.2%. SunEdison Semiconductor, which makes silicon wafers for the semiconductor industry, agreed to be bought by GlobalWafers of Taiwan. The deal valued SunEdison Semiconductor at $12 a share, or about $508 million. Its stock rose 38.5%. But the sector was dragged down by internet gear maker Cisco Systems reporting unimpressive quarterly results and saying it would lay off 5.5K employees, or about 7% of its staff. Its customers have been switching to remote data centers for computing instead of maintaining networks on their premises, so Cisco is focusing on equipment for big data centers and software and security. The company cut about 10K jobs over the last few years, and it joins companies like Microsoft, Intel and HP in eliminating jobs and overhauling its product lines. The stock lost 1.4% after slipping 1.3% Wednesday on reports it might make much bigger cuts.
Health care stocks also lagged the market. Shares of the life science company Agilent Technologies gave up 3.6% after investors were displeased with its cautious projections for the current quarter. Portola Pharmaceuticals stock sank 17.3% after regulators did not approve its drug AndexXa, which is designed to reduce severe bleeding during surgery by counteracting blood thinners.
But oil has continued to help bouy the markets. Benchmark United States crude added $1.40 to $48.19 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, gained 99 cents to $50.82 in London. It rose 62 cents the previous session. That gave energy companies a lift, and Marathon Oil stock rose 5.8%, while Devon Energy gained 3%.
In global markets during earlier sessions, the German DAX was up 0.6%, and in France the CAC 40 rose 0.4%. The FTSE 100 gained 1% in Britain. While in Asia, the Nikkei 225 declined 1.5% in Japan, and in Hong Kong, the Hang Seng gained 1%. The Shanghai composite index lost 0.2% in China.
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