Lower Oil Prices Drag on Energy Stocks
January 18 2017 - 1:33PM
Dow Jones News
By Jon Sindreu and Aaron Kuriloff
The Dow Jones Industrial Average slipped, dragged down by
declines from Goldman Sachs Group and UnitedHealth Group.
The Dow Jones Industrial Average lost 43 points, or 0.2%, to
19784 shortly after the opening bell. The S&P 500 fell less
than 0.1%, and the Nasdaq Composite gained 0.1%.
Goldman Sachs fell 1% after the U.S. investment bank reported
stronger-than-expected profits. Citigroup dropped 1.6% as the
bank's revenue missed forecasts.
High expectations for bank earnings have limited the impact of
beating expectations, some investors said. Financial shares have
propelled a postelection rally in stocks that has carried indexes
to new highs and the Dow Jones Industrial Average within reach of
20000.
"If you look at the banks and financial shares in general they
had such a big pop late last year that some of this good news is
already in the price," said Ed Campbell, portfolio manager at QMA,
a multi-asset manager owned by Prudential Financial.
UnitedHealth Group fell 2.5%, a day after reporting a 56%
increase in profit in the last quarter, powered by growth in its
insurance unit and Optum health-services arm. UnitedHealth has been
another large contributor to the Dow industrials' gain since
Election Day.
Investors have struck a cautious tone ahead of President-elect
Donald Trump taking office Friday, unwinding some risk-driven
trades that have dominated since the U.S. election on Nov. 8. While
markets initially focused on Mr. Trump's plans to slash taxes and
regulations and boost infrastructure spending, the
president-elect's rhetoric against free trade has also worried many
analysts.
Investors are now waiting for further clarity on such policies,
as well as corporate earnings, to decide whether growth and
inflation will come through, or whether markets have gotten ahead
of themselves after the election.
"A lot of the indicators we follow are now pointing at the
market being overstretched," said Andrew Pease, global head of
strategy at London-based Russell Investments. "The U.S. economy's
fine, but markets have fully priced that in already."
Energy shares in the S&P 500 slipped 0.4% as U.S. oil prices
dropped 2.3% to $51.30 a barrel amid concerns that rising U.S.
shale production may offset efforts by major producers to reduce
the supply of crude.
The Stoxx Europe 600 gained 0.2% and the FTSE 100 added 0.4%.
Asian shares were mixed, with the Japanese Nikkei closing 0.4%
higher.
After falling to 2.327% Tuesday, the lowest closing since late
November, the yield on the 10-year Treasury note recovered to
2.377%, according to Tradeweb.
The pound fell 0.7% against the U.S. dollar to $1.2305 after
Tuesday's 3% surge, the biggest daily rise in eight years. The WSJ
Dollar Index, which tracks the currency against a basket of 16
others, rose 0.6% after hitting a one-month low Tuesday.
Write to Jon Sindreu at jon.sindreu@wsj.com and Aaron Kuriloff
at aaron.kuriloff@wsj.com
(END) Dow Jones Newswires
January 18, 2017 13:18 ET (18:18 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
UnitedHealth (NYSE:UNH)
Historical Stock Chart
From Aug 2024 to Sep 2024
UnitedHealth (NYSE:UNH)
Historical Stock Chart
From Sep 2023 to Sep 2024