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, with
Disney and Goldman Sachs exacting a hefty toll on the Dow
industrials.
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 1 point, or less than 0.1%, at
2,464, led by a 1.9% loss in financials, a 1.7% decline in
telecommunications, and a 0.9% slide in the consumer-discretionary
sector.
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 1.9%,
while PowerShares KBW Regional Banking Portfolio ETF (KBWR) was
down 2.7%.
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. Shares of Goldman Sachs Group Inc. (GS) were
also weighing on the average, down 1.5%.
The Dow components were dragging the price-weighted blue-chip
gauge by a combined 60 points.
The tech-heavy Nasdaq Composite Index , meanwhile, was treading
water at 6,396.
Some analysts suggested that the combination 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)
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).
Against that backdrop, the Senate on Thursday advanced a deal
struck between President Donald Trump and Democratic leaders on
Wednesday that rolled together emergency relief for victims of
Hurricane Harvey with a short-term extension of the government's
funding and its borrowing limit.
In a 80-17 vote ended debate
(http://www.marketwatch.com/story/senate-passes-hurricane-aid-plus-debt-limit-government-funding-extension-2017-09-07-14914711)on
legislation approving $15.25 billion for relief and recovery
efforts for the Harvey and Irma hurricanes, as well as provisions
keeping the government running and its debt limit suspended until
Dec. 8.
Earlier in the day, Trump and Senate Minority Leader Chuck
Schumer reportedly agreed to pursue a deal that would remove the
need for Congress to repeatedly raise the U.S. debt ceiling
(http://www.marketwatch.com/story/trump-schumer-agree-on-planning-to-repeal-debt-ceiling-report-2017-09-07).
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.
Separately, 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%.
Another Dow component, General Electric Co. (GE) tumbled to a
2-year low after analysts at J.P. Morgan Chase & Co. said the
outlook for the industrial conglomerate was worse than his previous
estimates
(http://www.marketwatch.com/story/ges-stock-tumbles-to-2-year-low-after-jp-morgan-gets-more-bearish-2017-09-07).
Shares were down 3.9%.
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 15:04 ET (19:04 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Walt Disney (NYSE:DIS)
Historical Stock Chart
From Aug 2024 to Sep 2024
Walt Disney (NYSE:DIS)
Historical Stock Chart
From Sep 2023 to Sep 2024