U.S. stocks are slightly lower in afternoon trading after China reported a drop in exports in December and more in Monday’s Stock Market Update. Fears about the health of China’s economy and the global economy overall were a major contributor to the stock market’s plunge in late 2018.
A strong quarterly report from Citigroup helped bank stocks trade higher. Indexes overseas took small losses.
STOCK MARKET UPDATE
KEEPING SCORE: The S&P 500 index fell 13 points, or 0.5 percent, to 2,582 at closing time. The Dow Jones Industrial Average fell 230 points Monday morning, but recovered most of that and finished down 89 points, or 0.4 percent, to 23,906. The Nasdaq composite retreated 65 points, or 0.9 percent, to 6,905. The Russell 2000 index of smaller-company stocks shed 12 points, or 0.9 percent, to 1,434.
The S&P 500 dropped almost 20 percent from late September until the day before Christmas, partly because investors were worried that the global economy was slowing dramatically and could go fall a recession. Since Dec. 26, stocks have regained about half of what they lost in the downturn.
DRUG PRICES: A leading House Democrat, Rep. Elijah Cummings, announced a sweeping investigation of the pharmaceutical industry’s pricing practices for drugs that are used to treat conditions including cancer, diabetes, kidney failure and nerve pain.
The Trump administration is pursuing its own plan to lower drug prices by approving more generic medications and trying to do away with industry practices that allow manufacturers, insurers and pharmacy benefit managers to profit at the consumer’s expense.
Drugmaker AbbVie fell 2.5 percent to $85.06 while Merck lost 2 percent to $73.38.
MAKING BANK: Citigroup said its profits rose in the last three months of 2018, helped by a lower tax rate and lower expenses. Its profit and revenue both surpassed Wall Street’s forecasts and its stock gained 4.2 percent to $59.06.
CHINA TRADE: China’s exports slipped in December, and exports to the U.S. fell 3.5 percent as rising tariffs and broader weakness affected the world’s second-largest economy. Negotiators from the U.S. and China met earlier this month for three days of trade talks, but it’s not clear how much progress was made or when the two sides will meet again.
Apple lost 1.5 percent to $150. The company’s shares tumbled last month after it said sales in China were falling. Wynn Resorts, which has two of its three casinos in Macau, slumped 5 percent to $107.88.
THE QUOTE: Mark Esposito, president of Esposito Securities, said the calm reaction to the news from China suggests stocks won’t fall further than they did in December.
“That’s a very positive sign that, at least in the short term, we may have found a bottom,” he said. “People lose faith and hope when (the market) drops 20 percent in a very short period like it did.”
BREXIT: British lawmakers are scheduled to vote Tuesday on Prime Minister Theresa May’s deal covering Britain’s planned departure from the European Union, and all indications are that the deal will be rejected. That could contribute to volatility for U.K. markets, particularly the pound.
Some British legislators say the country should reconsider its decision to leave the bloc, possibly by another referendum. Others think that the country should depart on March 29 without a deal.
The FTSE 100 index fell 0.9 percent and the pound rose to $1.2865 from $1.2845.
POWER LOSS: PG&E, the parent of Pacific Gas and Electric, said it will file for Chapter 11 bankruptcy protection and its stock plunged 53.3 percent to $8.21. It faces potentially colossal liabilities over deadly wildfires in 2017 and 2018 and announced the resignation of CEO Geisha Williams on Sunday. The company says deliveries of natural gas and electricity shouldn’t be affected.
PG&E’s market value has dropped by $20 billion since November, when reports indicated PG&E had a power outage around the time and place the deadly Camp Fire began. That blaze killed at least 86 people and destroyed 15,000 homes.
Investors now value the company at $4.2 billion. Media reports say PG&E’s liabilities could reach $30 billion.
ALL MINE: Newmont Mining will buy Canada’s Goldcorp for $10 billion, creating the world’s biggest gold miner. Miners are consolidating as gold becomes more expensive to procure. Barrick Gold said it would by Randgold for more than $6 billion four months ago. Goldcorp rallied 7.8 percent to $10.45 while Newmont fell 9 percent to $31.75.
EXTRA, EXTRA: Gannett, the publisher of USA Today, rocketed 20.5 percent to $11.75 after Digital First Media said it offered to buy the company for $1.36 billion. Gannett said will review the proposal.
The Wall Street Journal reported that the hedge-fund backed Digital Media bought a stake in Gannett, and that it has been rebuffed repeatedly by the company about a sale.
BONDS: Bond prices turned lower. The yield on the 10-year Treasury note rose to 2.71 percent from 2.69 percent.
ENERGY: Benchmark U.S. crude oil gave up 2.1 percent to $50.51 per barrel in New York, while Brent crude, the international standard, fell 2.5 percent to $58.99 per barrel in London.
Natural gas jumped 15.9 percent to $3.59 per 1,000 cubic feet.
CURRENCIES: The dollar fell to 108.20 yen from 108.50 yen. The euro remained at $1.1465.
OVERSEAS STOCK MARKET UPDATE: Germany’s DAX slid 0.3 percent while the CAC 40 in France fell 0.4 percent.
Hong Kong’s Hang Seng index lost 1.4 percent and the Kospi in South Korea declined 0.5 percent.
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