December 14, 2017
Friday, November 7, 2014

Wall Street ends flat; healthcare off on new Obamacare challenge

US stocks closed little changed today, pressured by renewed uncertainty in healthcare stocks and by Disney shares, even as October payrolls data pointed to a resilient economy in the face of sluggish global growth.

The S&P 500 and Dow industrials closed at record highs and rose for a third consecutive week.

Health insurers fell sharply after the US Supreme Court agreed to hear a challenge to a key part of the Obamacare health law that, if successful, would limit the availability of federal health insurance subsidies for millions of Americans.

UnitedHealth Group fell 2.7 percent to $93.61, ranking as the largest weight on the Dow industrials. Hospital operator Tenet Healthcare fell 6.5 percent to $47.85 while managed care facilities operator Humana Inc was down 6.6 percent to $130.58.

Healthcare stocks had been pressured from the opening bell by Salix Pharmaceuticals, which closed down 34 percent at $91.47 in its biggest-ever daily drop.

Energy shares on the S&P 500 were the day's strongest performers, rising 1 percent. The sector is down 1.4 percent so far this year.

The Dow Jones industrial average rose 19.46 points, or 0.11 percent, to 17,573.93, the S&P 500 gained 0.71 points, or 0.03 percent, to 2,031.92 and the Nasdaq Composite dropped 5.94 points, or 0.13 percent, to 4,632.53.

For the week, the Dow rose 1.1 percent and the S&P added 0.7 percent in their third straight weekly gain. The Nasdaq closed the week up 0.04 percent.

Advancing issues outnumbered declining ones on the NYSE by 1,869 to 1,188, for a 1.57-to-1 ratio on the upside; on the Nasdaq, 1,370 issues fell and 1,321 advanced for a 1.04-to-1 ratio favoring decliners.

The benchmark S&P 500 index posted 52 new 52-week highs and one new low; the Nasdaq Composite recorded 101 new highs and 58 new lows.

Volume on US exchanges totaled about 6.5 billion shares, compared to the 7.24 billion average in the last five sessions.

In Europe, shares lost ground as pessimism over economic growth and loan demand in Europe hit bank stocks, while mixed US jobs data did little to buoy investor sentiment.

Equities had staged a short-lived rally on Thursday after European Central Bank chief Mario Draghi reiterated plans to revive the struggling euro zone economy by pumping more money into the economy.

But traders cited lingering doubts over the timing and size of possible future ECB measures, as well as signals from euro zone banks that suggested the outlook for loan growth remained bleak.

The STOXX Europe banks index was down 1.8 percent, with several Greek banks down 9 to 10 percent and France's Credit Agricole down 4 percent.

The pan-European FTSEurofirst 300 index was down 0.6 percent at 1517 GMT and looked set to post a weekly loss.

A monthly US non-farm payrolls report showed job creation solidly above 200,000 in October but shy of the 230-240,000 forecast by analysts, leaving investor sentiment little changed.

A positive set of corporate earnings updates did help some blue-chip stocks like ArcelorMittal and Allianz outperform, while the UK FTSE 100 index was up 0.3 percent thanks to a rebound in beaten-down mining stocks like Fresnillo.

But while cost-cutting has helped earnings growth in Europe, that has failed to completely offset the weaker economic signals.

About 70 percent of European companies have reported so far this earnings season. So far, 59 percent have met or beat profit forecasts and 61 percent have met or beat revenue forecasts, according to Thomson Reuters StarMine data.

In absolute terms, profits are up 13.6 percent versus the same quarter a year ago but revenues are up just 1.3 percent, highlighting the fact that Europe's earnings rebound has mostly come from cost-cutting and lower financing costs.

Meanwhile, foreign investors bought a likely record amount of Japanese futures last week, Nomura Securities said today, as buyers took heart from strong corporate earnings and upbeat industrial data.

Foreigners, who were net sellers in Japanese futures for the past five weeks, bought a total of 831.7 billion yen ($7.21 billion) worth of Japanese futures during Oct. 27-31.

The data includes the Nikkei futures, the Nikkei mini futures, the Topix futures and Topix mini futures.

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