Wall St. eases as oil prices, General Electric fall

The trading floor is seen on the final day of trading for the year at the New York Stock Exchange (NYSE) in Manhattan, New York
FILE PHOTO: The trading floor is seen on the final day of trading for the year at the New York Stock Exchange (NYSE) in Manhattan, New York, U.S., December 29, 2017. REUTERS/Andrew Kelly

January 16, 2018

By April Joyner

NEW YORK (Reuters) – Wall Street paused its rally on Tuesday, weighed down by weakness in General Electric shares and as lower oil prices dragged down the energy sector.

The energy sector fell 1.2 percent as Brent crude oil shed some of its recent gains, falling nearly $1 per barrel. [O/R] Industrials and materials were the other major laggards on the S&P, down 0.9 percent and 1.2 percent, respectively.

General Electric fell 2.9 percent after raising the prospect of breaking itself up and announcing more than $11 billion in charges from its long-term care insurance portfolio and new U.S. tax laws.

The CBOE Volatility index, a widely followed measure of market anxiety, rose to a more than 1-month high of 11.66.

“Lower energy prices are taking us down a little bit,” said Tracie McMillion, head of global asset allocation strategy at Wells Fargo Investment Institute in Winston-Salem, North Carolina.

But, she added, “investors are continuing to move into equities as they see returns. It’s feeding on itself, becoming a virtuous cycle, enticing more people in.”

The Dow Jones Industrial Average fell 10.33 points, or 0.04 percent, to 25,792.86, the S&P 500 lost 9.82 points, or 0.35 percent, to 2,776.42 and the Nasdaq Composite dropped 37.38 points, or 0.51 percent, to 7,223.69.

Earlier on Tuesday, the Dow Jones Industrial Average had broken above the 26,000 mark for the first time as fourth-quarter earnings season got off to a strong start following upbeat results from UnitedHealth and Citigroup.

UnitedHealth rose 1.9 percent after the largest U.S. health insurer reported results that beat estimates and raised its 2018 earnings outlook.

More than three quarters of the 30 S&P 500 companies that have reported so far have topped profit estimates, according to Thomson Reuters I/B/E/S.

“You’d typically see and expect the markets to interpret that in a positive manner, but a lot of indices have moved back. What’s held them back seems to be company-specific,” said Shawn Cruz, senior trading specialist at TD Ameritrade in Chicago, making reference to General Electric.

Cruz added that the Federal Reserve Bank of New York’s business conditions index, which came in slightly below expectations on Tuesday, may have also contributed to Wall Street’s dip.

Merck surged 5.8 percent after early results from a key study showed its blockbuster drug Keytruda and two chemotherapy medicines helped lung cancer patients live longer and stopped the disease from advancing.

Viacom fell 7.0 percent after sources told Reuters CBS Corp and the company were not in active merger discussions.

Declining issues outnumbered advancing ones on the NYSE by a 2.04-to-1 ratio; on Nasdaq, a 2.18-to-1 ratio favored decliners.

The S&P 500 posted 170 new 52-week highs and six new lows; the Nasdaq Composite recorded 243 new highs and 29 new lows.

Volume on U.S. exchanges was 8.30 billion shares, compared to the 6.48 billion average over the last 20 trading days.

(Additional reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva and James Dalgleish)

31 Comments on "Wall St. eases as oil prices, General Electric fall"

  1. mark christmas | January 16, 2018 at 3:50 pm |

    Muslim Messiah is my new favorite name for Hussain Obama. Thank you! By the way, if you find his birth certificate, school records, anyone who saw him in a college class or can find a real Presidential Library for the anointed one, please let me know…

  2. I see you have some heat on this one. No one president can control the economy; Obama does in fact deserve some of the credit for keeping us out of the ditch during the meltdown of 08′. Let’s be fair.

    • Willy Nilly | January 16, 2018 at 3:22 pm |

      Yes by borrowing a trillion-dollar stimulus and promised massive spending on infrastructure that would put people back to work. Looks like someone stole it to me.

      • Yes, I agree the stimulus did not go to many of those who needed it. Obama did not manage the distribution of the stimulus well. But to blame any president for the economy (good or bad) is a mistake in my view. There are thousands of moving pieces in our complex economy.

        • Willy Nilly | January 16, 2018 at 3:50 pm |

          Bob the economy is very simple Supply and Demand. when you mess with one it affects the other. When big government tries to harness it with regulations, that’s when you get inflation, and layoffs.

          • Well said … when Government gets between buyers and seller … watch out. The trouble now is that the sellers are the government. Us buyers are always going to lose. I don’t, sadly, see any way out of this mess other than massive boycotts.

          • Willy Nilly | January 16, 2018 at 4:42 pm |

            I don’t know what you mean you need to elaborate on that. The Government is a necessary evil. It buys mostly. I suppose it sells its services? Its supposed to protect us from the evils of Capitalism but is working with them instead of protection its turned into an Oligarchy. Its phony Capitalism. The laws are ignored for them but not for the rest of us.

          • Thanks for your comment. Yes we do need a government for the people, by the people and of the people. You are right there are almost (especially at the highest level) no people left in government. We all know that we have a corporate-run government. Corporations are not people. I’m not against government but I am against what we have now. Hope that clarifies.

            If we boycott the products that these powerful corporations aim to keep us addicted to, we deprive them of oxygen. For example I have one spoon, one fork and one knife, one bowl, and one plate. I ride my bike and have so little in my closet that it will fit in a small suitcase. If all of us lived like that we would be free of this “shop till we drop” lifestyle.

          • Willy Nilly | January 17, 2018 at 5:31 am |

            Hi Ranger, I know what you mean. It’s called Affluenza i watched a good doco on it. People buy stuff because it makes them feel good and after a week or so it wears off. I think because they are lacking a belief in God. And material is non lasting. They need to find happiness in God and nature. I’ve suffered from the same thing.

          • Yes, thanks for your comment. God and Nature these are the things in my view that lead to lasting happiness. We all suffer from some touch of Affluenza. May some of us find our way out.

    • mark christmas | January 16, 2018 at 3:52 pm |

      He should have let it all fail. He should have bailed out no one. His trillions spent went into the pockets of whom?? Not us Americans! The man should be arrested for acts of treason!

      • We all forget that Obama, Trump whoever are just the tools of big corporations and the very wealthy. Obama just bailed out those who control him. I don’t blame him – it deflects from the real issue at hand.

  3. I wonder where all this money is coming from? I’m guessing that big corps. are buying their own stock to drive up the price. If this is true it is going to eventually damage individual investors and retirement funds.

    As they say what goes up will go down. I predict great gnashing of teeth and much hand-wringing in the pretty near future.

    • Well then ranger bob make sure you are not in the stock market, meanwhile my 401 is doing fine.

    • HarryObrian | January 16, 2018 at 8:50 am |

      I had the same thought, corps buying their own and the auto deposits from 401’s. And the 401’s can’t be stopped or reassigned quick enough in time of stress. This is not speculative nor individual investor money. Looks like the roaring 20’s have now become the roaring teens…

      • Yes … well said. Thanks.

      • Disgusted by the Misleadia | January 16, 2018 at 2:33 pm |

        When I had a 401(k), I could exchange from one fund to another in a single business day. And if I didn’t want to keep making contributions to an equity fund, I could switch incoming funds to a money market fund, effective the next payday.

        This is normal if your 401(k) is administrated by one of the big players. Mine was administrated by Fidelity, across three different employers.

        • HarryObrian | January 17, 2018 at 1:14 pm |

          Yes, I know, but markets always move faster than a citizen can control them, especially when in a panic situation.

    • Slowpoke the Cruiser | January 16, 2018 at 12:33 pm |

      America’s wealth is not a zero-sum game – there is no pot of money with a lid you know. Or of course, if ya have a death wish and wish to self-fulfill your own prophesy, you can return your tax refund!

      • I always do return my tax refund. We are not taxed nearly enough to pay for the things we need to take care of each other. I hope you do the same act. If all of us returned the refunds we would be in much better shape as a country.

    • Disgusted by the Misleadia | January 16, 2018 at 2:27 pm |

      Some of the money is coming back from overseas, thanks to the reduction in corporate income taxes. But, most of the money is simply investors shifting from more conservative investments into equities.

      Stock buybacks take stock off the market, reducing the number of outstanding shares. It increases earnings per share, and also makes the shares more value at a given market value for the entire company.

      But, unless you are Apple ($200B coming back), stock buybacks are a drop in the bucket compared to new money from investors.

    • Willy Nilly | January 16, 2018 at 3:56 pm |

      I hear a lot of companies are paying out bonuses to their employees. buying up their own stock is reported in their prospectus and a smart investor wont find value in that. They would be hurting their own company if they did that. A Lot of tech companies are overvalued. Facebook comes to mind. The money is coming in from overseas.

  4. WrathMaster | January 16, 2018 at 7:08 am |

    I might be able to retire after all!

  5. Bill Smith 999935 | January 16, 2018 at 6:54 am |

    Happy Days Are Here Again !!

  6. So the market has gone up 25% in a year but their trying to give Obama the credit

Comments are closed.