US Stocks Rally Dissipates on Post-Brexit IMF Slowdown Report and Poor Q2 Results

US Stocks Rally Dissipates on Post-Brexit IMF Slowdown Report and Poor Q2 Results

The US markets were mostly lower today as a near three-week rally that took indexes to new highs, finally lost momentum. Coupled with Netflix and other companies reporting disappointing results, and the International Monetary Fund (IMF) predicting a slowdown in Britain after its vote to leave the European Union, it seemed timed for enthusiasm to wane and lock in profits.



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In mid-afternoon trading, the Dow Jones Industrial was down 0.02% and the S&P 500 stock index was down 0.3%. The Nasdaq also dropped 0.47%. The S&P 500 had surged just over 8% since June 27, when stocks hit a low after the British vote to leave the European Union. Fears that the departure would destabilize the global economy have largely dissipated, but questions remain. The International Monetary Fund trimmed its forecast for global economic growth this year to 3.1% from 3.2%, mostly because of anticipated slowdowns in Britain and other advanced economies as a result of the “Brexit” vote.

Netflix was the worst-performing stock in the S&P 500, down 13.4%. It added fewer subscribers last quarter than it had expected, which it attributed to customers leaving before a rate freeze on their accounts expired. Shares of health insurers fell after Bloomberg News reported that United States antitrust officials might move to block two big deals in the industry. Anthem has agreed to buy Cigna, and Aetna hopes to absorb Humana. Shares of each company fell more than 2.5%. Humana stock sank almost 6 percent, the second-biggest decline in the S.&P. 500.
Shares of the cigarette maker Philip Morris International fell 3.4% after the company reported weaker quarterly results than expected. Smokers in North Africa, Japan, Argentina and elsewhere bought fewer cigarettes, leading to a 5% drop in the company’s shipments from a year earlier.

 

Home construction strengthened more in June than economists had expected. Activity was particularly high in the Northeast and West, a report from the Commerce Department showed. The June reading on housing starts was the highest since February, though down from a year earlier.

The traditional safe-haven sectors were up, but only modestly. The price of gold rose $3.10, or 0.2%, to $1,332.40 an ounce. Treasury prices also inched higher. The yield on the 10-year note, which moves in the opposite direction from its price, fell to 1.54% from 1.59% late Monday.
 

Investors are anticipating events this week that may help them better gauge the health of the world economy and what it might mean for stock markets. The European Central Bank’s policy rate decision is Thursday, and while no extra stimulus is expected, the bank’s views about the economy could create volatility in markets.


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