U.S. stocks recovered from an early slide Thursday, placing the market on course to break a five-day losing streak and more in Thursday’s Stock Market Update. Gains in technology companies, banks and industrial stocks outweighed losses among big retailers, homebuilders and utilities. Energy stocks rose along with crude oil.
European indexes finished mostly lower as the British pound slumped amid discord over a new deal for Britain’s departure from the European Union next Spring. A disorderly exit could result in economic disruption for Britain and threaten London’s status as a global financial hub.
STOCK MARKET UPDATE
KEEPING SCORE: The S&P 500 index rose 28 points, or 1 percent, to 2,730 at closing time. The Dow Jones Industrial Average gained 210 points, or 0.8 percent, to 25,291. The Nasdaq composite climbed 122 points, or 1.7 percent, to 7,259. The Russell 2000 index of smaller companies picked up 18 points, or 1.2 percent, to 1,520.
The benchmark S&P 500 has declined five straight days. The indexes are now on track to finish the month with a loss.
MARKET LEADER: Technology sector stocks accounted for much of the market’s gain. Cisco Systems rose 4.7 percent to $46.41 a day after the company reported quarterly results that topped Wall Street’s forecasts.
BANKING ON BANKS: Financial sector stocks rebounded Thursday after taking heavy losses a day earlier. Bank of America gained 2.2 percent to $27.82.
INDUSTRIALS RALLY: Flour was among the big gainers in the industrial sector. The stock added 3.4 percent to $46.29.
ROTTEN RETAIL: Several big retailers slumped. Dillard’s slid 14.5 percent to $63.09 after the retailer’s quarterly earnings fell far short of what investors were expecting. Macy’s gave up 3.1 percent to $32.20. Nordstrom dropped 3 percent to $59.27.
HOUSE OF PAIN: KB Home had its steepest drop in more than three years after the homebuilder said new-home orders are down sharply in its current quarter versus a year ago. The Los Angeles-based company’s revenue projection for the quarter also fell below analysts’ estimates. The stock plunged 17.2 percent to $17.22. Shares in other major homebuilders also skidded. Lennar declined 5.9 percent to $39.14, while PulteGroup lost 3.4 percent to $23.70.
While a strong economy and job market helped boost home sales earlier this year, rising mortgage rates and home prices are becoming hurdles for many would-be buyers. The annual rate of new U.S home sales has dropped 15.3 percent since May, eliminating much of the strength in sales from the first five months of 2018.
BIG DECLINER: Shares in Pacific Gas & Electric extended their steep slide, posting the biggest decline in the S&P 500. Investors are concerned over whether the power company can sustain potential losses related to a deadly blaze in Northern California. PG&E is facing a lawsuit claiming it is responsible for the devastating blaze that broke out last week. PG&E shares were down 28.5 percent to $18.30. The company’s market value has dropped 60 percent since Nov. 8.
Another utility, Edison International, is down about 30 percent in the same period. Edison’s shares were off 7.4 percent to $49.91.
ENERGY: Oil prices were headed higher for the second straight day. Benchmark U.S. crude rose 0.9 percent to $56.75 a barrel in New York. Brent crude, used to price international oils, gained 1.1 percent to $66.83 a barrel in London. Despite the latest pickup, U.S. crude oil is still down 13.1 percent for the month. The average price for a gallon of gasoline in the U.S. has dropped to $2.67 from $2.89 a month ago, according to AAA.
Natural gas, which spiked Wednesday amid forecasts calling for a cold snap across much of the Northeast and South, slumped 14.8 percent to $4.12 per 1,000 cubic feet.
Energy stocks got a boost from the pickup in oil prices. Noble Energy gained 3.1 percent to $25.51.
BOND YIELDS: Bond prices rose. The 10-year Treasury fell to 3.11 percent from 3.12 percent late Wednesday.
CURRENCIES: The dollar rose to 113.64 yen from 113.51 yen on Wednesday. The euro fell to $1.1329 from $1.1338. The pound plunged to $1.2755 from $1.3038 on concerns that a new deal to enable the United Kingdom to separate from the European Union will not get approved by Britain’s parliament.
OVERSEAS STOCK MARKET UPDATE: Major European stock indexes closed mostly lower following a flare-up in discord over British Prime Minister Theresa May’s plan for Britain’s departure from the European Union next year. She persuaded a majority in her Cabinet to back an agreement that would allow Britain to stay in a customs union while a trade treaty is negotiated, but the deal faces an uncertain fate in Parliament and two of her Cabinet ministers, including the Brexit minister, resigned in protest.
The disarray surrounding the process, which is throwing London’s future as a financial center into doubt, sent the pound lower against other currencies and hit British bank stocks. Barclay’s slid 5.7 percent to $8.49 and Royal Bank of Scotland plunged 10.3 percent to $5.85.
All told, Germany’s DAX dropped 0.5 percent and France’s CAC 40 shed 0.7 percent. London’s FTSE 100 rose 0.1 percent. In Asia, Hong Kong’s Hang Seng added 1.7 percent and Tokyo’s Nikkei 225 gave up 0.2 percent. Seoul’s Kospi gained 1 percent. India’s Sensex rose 0.6 percent. Bangkok and New Zealand declined while Taiwan and other Southeast Asian markets rose.
© The Associated Press. All rights reserved.
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