Sign up for the battlefordsNOW newsletter

US stocks dip as banks and energy companies fall

Feb 24, 2017 | 9:45 AM

NEW YORK — U.S. stocks are declining Friday morning as investors again look for safer places to put their money. Business technology company Hewlett Packard Enterprises is falling after it announced weak sales. Bond prices are dropping and yields are rising. That’s sending interest rates lower, which hurts banks. High-dividend stocks are rising.

KEEPING SCORE: The Dow Jones industrial average lost 56 points, or 0.3 per cent, to 20,754 as of 11:35 a.m. Eastern time. The Standard & Poor’s 500 index fell 6 points, or 0.3 per cent, to 2,357. The Nasdaq composite sank 16 points, or 0.3 per cent, to 5,819. The Russell 2000 index, which tracks smaller companies, slid 4 points, or 0.3 per cent, to 1,390.

The blue-chip Dow average has risen for 10 days in a row. Other major indexes are mixed this week.

BONDS: Bond prices sank again. The yield on the 10-year Treasury note slid to 2.31 per cent from 2.39 per cent. Lower bond yields push interest rates lower, which means banks will make less money on mortgages and other loans. Wells Fargo slipped 93 cents, or 1.6 per cent, to $57.56 and Bank of America fell 34 cents, or 1.4 per cent, to $24.24. Investment banks and insurers traded lower as well.

With yields down, investors bought phone company and utility stocks, which pay large dividends similar to bonds. AT&T rose 29 cents to $42.24 and American Electric Power gained $1.01, or 1.5 per cent, to $67.02.

HPE HURTING: Hewlett Packard Enterprise, which sells data-centre hardware and other commercial tech gear to big organizations, slumped after cutting its profit estimate for the year. It named several problems including the strong dollar, expenses, and other problems that it said will be “near-term.” The company’s quarterly sales dropped 10 per cent and weren’t as strong as analysts hoped. Its stock skidded $1.95, or 7.9 per cent, to $22.71.

Chipmakers and other technology companies also lost ground.

METAL GAINS: Gold and silver continued to rise. Gold, which jumped 1.5 per cent a day earlier, picked up 0.4 per cent to $1,256 an ounce. The metal is trading at its highest price since just after the presidential election, although it’s down sharply from this summer. Silver added 1.2 per cent, to $18.34 an ounce and copper inched higher after a steep loss the previous day. That helped mining companies trade higher.

PENNY IN FOR A POUNDING: Department store operator J.C. Penney said it will close 130 to 140 stores and two distribution centres in the next few months. That’s about 14 per cent of its stores. Penney also said it will offer voluntary early retirement plans to about 6,000 employees. The company is trying to cut costs as it competes with online retailers. Its stock gave up 57 cents, or 8.3 per cent, to $6.29.

Competitor Nordstrom jumped after it disclosed a better-than-expected quarterly profit with help from strong sales online and at Nordstrom Rack. Its shares gained $2.41, or 5.5 per cent, to $46.35. Kohl’s also rose $1.67, or 4.1 per cent, to $42.58. The stock fell 2 per cent Thursday after investors weren’t thrilled by the company’s fourth-quarter report.

PRISON COMPANIES KEEP SURGING: For-profit prison operator CoreCivic rose 95 cents, or 2.8 per cent, to $34.95 and Geo Group added $1.70, or 3.6 per cent, to $49.07. Late Thursday, Attorney General Jeff Sessions directed the federal Bureau of Prisons to continue doing business with private prison operators. That reversed an Obama administration policy that sent the stocks tumbling when it was announced in August.

The companies operate detention facilities used by Immigration and Customs enforcement as well as prisons and they get about half their revenue from contracts with the federal government. Their stocks have soared since Donald Trump was elected president in November. Investors expected the Obama-era policy would be reversed and that Trump’s policies toward immigration and criminal justice would strengthen their business. CoreCivic has climbed 140 per cent since the election and Geo Group has doubled in value.

ENERGY: Benchmark U.S. crude oil fell 38 cents to $54.07 a barrel. Brent crude, the standard for pricing international oils, fell 44 cents to $56.38 a barrel in London. Energy companies continued to trade lower. They’ve fallen sharply over the last month. The S&P 500 energy company index is down more than 6 per cent this year while the broader S&P is up 5.5 per cent.

CURRENCIES: The dollar slid to 112.27 yen from 112.75 yen. The euro rose to $1.0580 from $1.0574.

OVERSEAS: France’s CAC 40 slumped 1.3 per cent while the DAX in Germany fell 1 per cent. In Britain the FTSE 100 shed 0.4 per cent. Japan’s benchmark Nikkei 225 lost 0.5 per cent and South Korea’s Kospi fell 0.6 per cent. The Hang Seng of Hong Kong fell 0.5 per cent.

___

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at http://bigstory.ap.org/journalist/marley-jay

Marley Jay, The Associated Press