US stocks ring in 2017 with gains as health care stocks rise
By Marley Jay
NEW YORK (AP) — U.S. stocks are moving higher on the first trading day of 2017. Health care companies, which fell last year as the rest of the market moved higher, are making some of the biggest gains. While stock indexes are broadly higher, they’ve surrendered most of an earlier gain.
KEEPING SCORE: The Dow Jones industrial average added 36 points, or 0.2 percent, to 19,798 as of 12:20 p.m. Eastern time. The Standard & Poor’s 500 index rose 10 points, or 0.4 percent, to 2,248. The Nasdaq composite picked up 24 points, or 0.5 percent, to 5,407. The Russell 2000 index, which tracks small-company stocks, lagged the market as it edged up 2 points, or 0.2 percent, to 1,359. The Russell rose almost 20 percent last year and did far better than indexes focused on larger companies. U.S. stocks are coming off a three-day losing streak.
ON THE MEND: Health care stocks made some of the biggest gains at midday Tuesday. Merck & Co. rose $1.27, or 2.2 percent, to $60.14 and biotech giant Amgen picked up $4.23, or 2.9 percent, to $150.44. Prescription drug distributor McKesson gained $5.86, or 4.2 percent, to $146.31. The S&P 500’s health care index fell 4 percent last year. It was the only S&P 500 sector that traded lower as the S&P 500 itself rose 9.5 percent for the year.
BONDS: Bond prices fell. The yield on the 10-year Treasury note rose to 2.47 percent from 2.43 percent late Friday. Higher bond yields are linked to higher interest rates, and bank stocks made big gains. Citigroup rose 90 cents, or 1.5 percent, to $60.33 and Morgan Stanley picked up 55 cents, or 1.3 percent, to $42.80. Banks and energy companies both climbed more than 20 percent last year.
Utility companies fell, and real estate investment trusts and companies that make and sell household goods made far smaller gains than the rest of the market. Those stocks are often compared to bonds because they pay large dividends, but the jump in yields Tuesday encouraged investors to look elsewhere.
COPY THAT: Xerox surged 91 cents, or 15.8 percent, to $6.66 after it split itself in two, a move the company announced almost a year ago. The original Xerox kept its printer and copier business. The second company will focus on business process outsourcing, providing payment processing and other services. Xerox will receive $1.8 billion in cash.
The new company, Conduent Inc., now trades under the ticker symbol “CNDT.” That stock lost $1.02, or 6.9 percent, to $13.88.
ENERGY: Oil prices turned lower after jumping more than 2 percent early in the day. U.S. crude gave up $1.26, or 2.3 percent, to $52.47 a barrel in New York. Brent crude, used to price international oils, skidded $1.28, or 2.3 percent, to $55.54 a barrel in London.
Meanwhile natural gas companies dropped as natural gas futures dropped 12.2 percent. Southwestern Energy lost 99 cents, or 9.1 percent, to $9.83 and Cabot Oil & Gas gave up $1.52, or 6.5 percent, to $21.84.
MANUFACTURING ACTION: The manufacturing sector continued its recovery and ended 2016 on a strong note. The Institute for Supply Management said its manufacturing index rose to 54.7 in December, its highest reading of the year. That was the fourth straight month of expansion and the ninth out of the last 10. The result was a bit stronger than analysts expected.
MISSING 2016: Graphics processor maker Nvidia couldn’t break out of a recent slump. The stock more than tripled in value last year, but hit a wall in the final days of trading. The stock slid $5.69, or 5.3 percent, to $101.05. It’s down 14 percent since Dec. 27, when it closed at an all-time high.
DOUBLE CLICKED: Technology stocks also traded higher. Facebook added $1.54, or 1.3 percent, to $116.39 and Alphabet, Google’s parent company, rose $15.44, or 1.9 percent, to $807.89. On Monday Alphabet announced a partnership with Fiat Chrysler. The companies will work together on a connected car system. Fiat Chrysler stock picked up 44 cents, or 4.8 percent, to $9.56.
CURRENCIES: The dollar jumped to 117.68 yen from 116.78 yen. The euro slumped to $1.0414 from $1.0531.
OVERSEAS: The FTSE 100 index in Britain rose 0.5 percent to another all-time high. The French CAC 40 added 0.3 percent. Germany’s DAX slipped 0.1 percent. Hong Kong’s Hang Seng index gained 0.7 percent and the Kospi in South Korea rose 0.9 percent. Tokyo’s stock market remained closed for the New Year’s holiday.