By Mark DeCambre and Anora Mahmudova, MarketWatch
Financials sell off as insurers are hit in wake of hurricanes
Harvey, Irma
U.S. stock indexes tilted lower in Thursday afternoon trade as
investors sold financials and consumer-discretionary shares.
Investors were tracking Hurricane Irma and focused on European
Central Bank President Mario Draghi's comments about the future of
monetary stimulus in the eurozone. The ECB left key interest rates
unchanged, while Draghi indicated that the decision on how to taper
a quantitative-easing program will come in October
(http://blogs.marketwatch.com/thetell/2017/09/07/ecb-live-blog-is-a-strong-euro-making-mario-draghi-miserable/).
The S&P 500 was last down 2.57 points, or 0.1%, at 2,463,
led by a 1.8% loss in financials and a 1% slide in consumer
discretionary.
Banking stocks fell sharply following a drop in the 10-year
Treasury note yield
(http://www.marketwatch.com/story/treasury-yields-slip-ahead-of-ecb-news-conference-2017-09-07),
which declined 6 basis points to 2.04%. Lower bond yields to which
borrowing and lending rates are tied means that banks profit less
from the spread between short-term and long-term lending.
The Financials Select Sector SPDR Fund (XLF) was down 2%, while
PowerShares KBW Regional Banking Portfolio ETF (KBWR) was down
2.5%.
The Dow Jones Industrial Average , meanwhile, was off 37 points,
or 0.2%, at 21,770. Walt Disney Co. (DIS) fell 4% after the
entertainment giant's CEO Bob Iger lowered Wall Street's full-year
guidance for earnings. Another Dow component, Apple Inc. (AAPL),
saw its shares trading lower after The Wall Street Journal reported
that it was facing production delays
(http://www.marketwatch.com/story/iphone-8-production-glitches-could-mean-delays-when-orders-start-wsj-2017-09-07-12914245)
in the making of its new iPhone 8. Its shares were down 0.3%.
The tech-heavy Nasdaq Composite Index was treading water at
6,394.
Some analysts suggested that the combination of a number of
devastating hurricanes hitting the U.S. and potential escalation of
nuclear threat in North Korea is keeping investors somewhat
cautious. Category 5 Hurricane Irma has wrecked
(http://www.marketwatch.com/story/death-toll-rises-to-8-as-hurricane-irma-barrels-through-caribbean-heads-for-florida-2017-09-07)a
string of Caribbean Islands as it barrels toward the Florida
coast.
"Investors don't want to go into the weekend when North Korea is
scheduled to show its military prowess during the Founders day
celebration without their hedges in place," said Quincy Krosby,
chief market strategist at Prudential Financial.
Other analysts noted stocks have remained largely resilient in
the face of escalating geopolitical tensions, storm damage, lofty
valuations, and central-bank moves.
See:Why investors are so chill about North Korea, hurricanes,
and everything else
(http://www.marketwatch.com/story/why-investors-are-so-chill-about-north-korea-hurricanes-and-everything-else-2017-09-06)
The major U.S. benchmarks closed higher on Wednesday
(http://www.marketwatch.com/story/us-stock-futures-kept-in-check-by-worries-over-north-korea-hurricane-irma-2017-09-06)
after congressional leaders and President Donald Trump agreed to
extend the debt-limit deadline and fund the government through
mid-December.
The agreement raised hopes for more bipartisan deals that would
allow the Trump administration to move forward with its promised
economic reforms. However, it also raised concerns that
divisiveness in the Republican party may limit further policy
success, because other GOP leaders weren't in favor of a short-term
agreement.
First Take:Trump's deal with 'Chuck and Nancy' may improve
chances for his legislative agenda
(http://www.marketwatch.com/story/debt-ceiling-deal-may-slightly-improve-chances-for-trump-agenda-2017-09-06)
Hurricane Irma comes just two weeks after Hurricane Harvey hit
the Texas and Louisiana Gulf Coast, where damages are estimated by
AccuWeather to be up to $190 billion
(http://www.marketwatch.com/story/hurricane-harvey-could-cost-190-billion-be-worst-ever-us-natural-disaster-says-accuweather-2017-08-31).
Read:JetBlue and Delta offer special pricing to people fleeing
Hurricane Irma
(http://www.marketwatch.com/story/jetblue-and-delta-offer-special-pricing-to-people-fleeing-hurricane-irma-2017-09-06)
ECB in focus: The ECB left key interest rates unchanged and
expects them to remain at present levels for "extended period". In
the accompanying statement, which was virtually identical to the
previous one, the central bank said that asset buying will continue
at a EUR60 billion ($71 billion) a month through year-end or beyond
and quantitative easing could be ramped up if the outlook
deteriorates.
The euro strengthened against rivals after Draghi answered
questions during the news conference, hitting $1.20 in New York
trade. That helped push the ICE Dollar Index down 0.8% to
91.566.
Read: 4 takeaways from ECB President Mario Draghi's news
conference
(http://www.marketwatch.com/story/4-takeaways-from-ecb-president-mario-draghis-news-conference-2017-09-07)
European stocks
(http://www.marketwatch.com/story/european-stocks-hold-steady-in-runup-to-ecb-update-2017-09-07)
trimmed earlier gains but were still slightly higher.
Economic news:Initial jobless claims
(http://www.marketwatch.com/story/storm-surge-hurricane-harvey-boosts-jobless-claims-by-62000-to-298000-2017-09-07)in
the period running from Aug. 27 to Sept. 2 surged by 62,000 to
298,000, reaching the highest level since spring 2015, largely due
to Hurricane Harvey that left many in Texas unable to work.
Among Federal Reserve speakers, Cleveland Fed President Loretta
Mester, speaking at the Economic Club of Pittsburgh, said she backs
a gradual increase of interest rates.
New York Fed President William Dudley will speak at New York
University at 7 p.m. Eastern. Later, Kansas City Fed President
Esther George will discuss the U.S. economic outlook at the Omaha
Economic Forum in Omaha, Neb., at 8:15 p.m. Eastern.
On Wednesday, Fed Vice Chairman Stanley Fischer said Wednesday
that he would resign from the central bank next month.
Read:Fed's departing Fischer remembered as 'stalwart' amid
central bank turmoil
(http://www.marketwatch.com/story/teacher-to-bernanke-and-draghi-fischer-remembered-as-giant-in-field-2017-09-06)
Stock movers: Shares of GoPro Inc.(GPRO) rallied 13% after the
wearable camera maker said it expects to be profitable on an
adjusted basis in the third quarter.
Shares of RH(RH) soared 43% after the upscale retailer formerly
known as Restoration Hardware reported earnings that topped Wall
Street estimates
(http://www.marketwatch.com/story/rh-shares-soar-30-on-earnings-beat-raised-guidance-2017-09-06)
late Wednesday.
Amazon.com Inc.(AMZN) shares rose 1.1% after the online retailer
said it plans to open a second headquarters somewhere in North
America
(http://www.marketwatch.com/story/amazon-begins-city-search-for-second-n-american-headquarters-plans-to-invest-over-5-billion-2017-09-07)
that will house up to 50,000 employees and cost $5 billion to build
and operate.
Facebook Inc.(FB) shares dipped 0.2% after the company late
Wednesday said it traced ad sales totaling $100,000 from Russian
accounts
(http://www.marketwatch.com/story/facebook-links-thousands-of-political-ads-to-russian-troll-farm-2017-09-06),
some of which are likely linked to a troll farm in St. Petersburg
called the internet Research Agency.
Mastercard Inc.(MA) shares jumped 3.4% to trade at a record
(http://www.marketwatch.com/story/mastercards-stock-heads-for-record-open-after-revenue-outlook-raised-2017-09-07)after
the company raised its revenue outlook. Rival Visa Inc. (V) shares
also rose, up 1.6%.
Barnes & Noble Inc.(BKS) shares sank 7.3% after the
bookseller reported fiscal first-quarter earnings and sales that
missed consensus.
Other markets:Asian markets closed mixed
(http://www.marketwatch.com/story/south-korea-leads-gains-in-asia-as-markets-rebound-2017-09-06),
with South Korean and stocks ending higher, but Chinese and Hong
Kong lower.
Crude-oil was slightly lower, while gold prices rose 1% to
$1,351.70 a troy ounce.
--Sara Sjolin contributed to this article
(END) Dow Jones Newswires
September 07, 2017 13:18 ET (17:18 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Walt Disney (NYSE:DIS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Walt Disney (NYSE:DIS)
Historical Stock Chart
From Apr 2023 to Apr 2024