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Stocks mixed despite a strong private hiring report

Specialist Meric Greenbaum, left, and trader Tommy Kalikas

Specialist Meric Greenbaum, left, and trader Tommy Kalikas work on the floor of the New York Stock Exchange, Tuesday, March 7, 2017.  Credit: AP / Richard Drew

Stocks are mostly lower Wednesday as investors bet on economic growth and sell high-dividend stocks like utility companies and real estate investment trusts. A survey of private business payrolls showed employers added the most jobs in three years in February, and banks are moving up as bond yields and interest rates rise.

KEEPING SCORE: The Standard & Poor’s 500 index lost 1 point, or 0.1 percent, to 2,367 as of 11:53 a.m. Wednesday on Wall Street. The Dow Jones industrial average lost 27 points, or 0.1 percent, to 20,897. The Nasdaq composite jumped rose 8 points, or 0.1 percent, to 5,842 as health care and technology companies rose. The Russell 2000 index of smaller-company stocks fell 2 points, or 0.2 percent, to 1,372.

About two-thirds of the stocks on the New York Stock Exchange fell as investors continued to do more selling than buying.

SURVEY SAYS: Payroll processor ADP said private businesses added 298,000 jobs in February thanks in part to big increases in construction and manufacturing jobs. The U.S. government will issue its own report on the broader jobs market Friday. U.S. employers added 261,000 jobs in January.

BONDS: Bond prices dropped. The yield on the 10-year Treasury note jumped to 2.56 percent from 2.52 percent. That took banks and other financial companies higher because they stand to make more money on mortgages and other loans as interest rates rise. Citigroup jumped $1.33, or 2.2 percent, to $61.83. Other financial firms also rose. Franklin Resources picked up 35 cents to $42.73.

Federal Reserve policymakers will meet next week, and investors expect the central bank to raise interest rates for the first time since December.

Stocks that pay big dividends, like real estate investment trusts and utilities, stumbled. Those stocks are often compared to bonds because of their hefty payments to shareholders, but when bond yields rise, investors often sell those stocks so they can buy bonds instead. NRG Energy lost 30 cents, or 1.8 percent, to $16.80 and Realty Income dropped $1.73, or 2.9 percent, to $58.11.

ENERGY: Benchmark U.S. crude fell 99 cents, or 1.9 percent, to $52.15 per barrel in New York. Brent crude, used to price international oils, fell 93 cents, or 1.7 percent, to $54.99 a barrel in London. Energy stocks continued to lag the rest of the market. The S&P 500 energy index is down 7 percent this year, the biggest loss among the 11 industry groups in the broader index.

HEALTH CARE CHANGES COURSE: Biotechnology companies and other drugmakers bounced back after sharp losses a day earlier. Investors worried about price limits or cuts after President Donald Trump tweeted that he is working on a plan to reduce prices. The Nasdaq Biotechnology index rose 1.1 percent, which made up for most of its 1.5-percent loss Tuesday.

BLOCK PARTY: H&R Block jumped after the tax preparer reported solid third-quarter results and said it’s seeing good results early in tax season, the most important time of the year for the company. Block said it is seeing a smaller decrease in people who are filing their taxes online than its competitors are. The stock advanced $3.25, or 15.6 percent, to $24.09.

FASHION CASUALTIES: Urban Outfitters sank $1.38, or 5.4 percent, to $24.03 after analysts said they were disappointed with the retailer’s forecasts for the new fiscal year. Clothing and accessories company Express gave a weak set of estimates for the current year. It called for a smaller profit and a bigger decline in sales than analysts had expected, and its stock fell $1.30, or 12.2 percent, to $9.37.

FIRST PLACE: The Children’s Place, which sells clothing and accessories for children, soared after it reported strong fourth-quarter results and its guidance was much stronger than analysts expected. Children’s Place also doubled its quarterly dividend to 40 cents and announced it will buy back more stock. It is also closing more stores than it previously planned, with 300 locations now scheduled to close by 2020. The stock gained $16.45, or 16.5 percent, to $116.35.

NOT GOING BACK FOR SECONDS: Chicken and biscuits restaurant chain Bojangles tumbled after its profit and sales projections fell far short of Wall Street’s forecasts. Its stock plunged $1.30, or 6.6 percent, to $18.45.

CURRENCY: The dollar rose to 114.67 yen from 114.05 yen. The euro slipped to $1.0548 from $1.0568.

OVERSEAS: The French CAC 40 rose 0.1 percent and the DAX in German was little changed. The FTSE 100 in Britain lost 0.1 percent. Tokyo’s Nikkei 225 index shed 0.5 percent and in Hong Kong the Hang Seng advanced 0.4 percent. The Kospi in South Korea was unchanged.

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