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After a bad week, US stock indexes slip again, led by banks
Economy & Business By: The Bullet Wire February 5th, 2018 8:01 am
NEW YORK (AP) — U.S. indexes slipped in early trading Monday, following global markets lower. Banks are leading the way lower after the Federal Reserve hit Wells Fargo with new sanctions over a scandal that involved opening millions of phony consumer accounts. Industrial companies including Boeing and Caterpillar are giving back some of the big gains they have made over the last year. Energy companies are falling with oil prices. Markets in Asia and Europe were also lower. U.S. bond yields were slightly higher.
KEEPING SCORE: The Standard & Poor’s 500 index lost 12 points, or 0.5 percent, to 2,749 as of 10 a.m. The Dow Jones industrial average was down 144 points, or 0.6 percent, to 25,380. The Nasdaq composite fell 11 points, or 0.2 percent, to 7,230. The Russell 2000 index of smaller-company stocks fell 5 points, or 0.3 percent, to 1,542.
The S&P 500 is down about 4.5 percent from its latest record high, set Jan 26. That is its sharpest decline from a peak since June 2016, when stocks sold off after Britain’s vote to leave the European Union.
Investors are worried about evidence of rising inflation in the U.S. Increased inflation might push the Federal Reserve to raise interest rates more quickly, which could slow down economic growth. They’re also worried about higher bond yields, which make it more expensive for people and businesses to borrow money, and also make bonds more appealing to investors versus stocks.
WELLS FARGO PLUNGES: Wells Fargo dropped $5.25, or 8.2 percent, to $58.82. Late Friday the Fed said it will freeze Wells Fargo’s assets at the level where they stood at the end of last year until it can demonstrate improved internal controls. The San Francisco bank also agreed to remove four directors from its board.
Other financial companies also sank. Berkshire Hathaway fell $5.93, or 2.8 percent, to $203.19 and Bank of America shed 57 cents, or 1.8 percent, to $31.38.
ENERGY: Benchmark U.S. crude slid 81 cents, or 1.2 percent, to $64.64 a barrel in New York. Brent crude, used to price international oils, fell 99 cents, or 1.4 percent, to $67.59 a barrel in London.
Exxon Mobil lost $1.91, or 2.3 percent, to $82.62 and Chevron gave up $2.02, or 1.7 percent, to $116.56. Both companies reported disappointing fourth-quarter results on Friday and are coming off their biggest losses in years.
FINAL OFFER: Chipmaker Broadcom raised its offer for competitor Qualcomm to $121 billion in cash and stock, or $82 per share, and called the bid its best and final offer. It had offered $103 billion for Qualcomm, and that company says it will review the bid. Broadcom rose $3.23, or 1.4 percent, to $238.71 and Qualcomm dipped $1.70 , or 2.6 percent, to $64.39.
BONDS: Bond prices fell slightly. The yield on the 10-year Treasury note rose to 2.85 percent from 2.84 percent.
CURRENCIES: The dollar fell to 110 yen from 110.28 yen. The euro slipped to $1.2405 from $1.2451.
GERMAN COALITION TALKS: Stocks in Europe also fell as German political parties struggled to form a government. Chancellor Angela Merkel’s conservative Union bloc and the center-left Social Democrats originally set a Sunday deadline to wrap up talks on extending their alliance of the past four years but budgeted two extra days as a precaution when formal negotiations started Jan. 26.
Britain’s FTSE 100 lost 1.1 percent while France’s CAC 40 slid 1.2 percent. The DAX in Germany shed 0.7 percent.
ASIA: Japan’s benchmark Nikkei 225 tumbled 2.6 percent and the South Korean Kospi shed 1.3 percent. Hong Kong’s Hang Seng index sank 1.1 percent.
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jayt
Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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