FILE- In this Thursday, Nov. 8, 2018, file photo, specialist Dilip Patel, left, works at his post on the floor of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EDT on Thursday, Nov. 15. (AP Photo/Richard Drew, File)

Technology companies lead afternoon rebound for US stocks

November 15, 2018 - 2:57 pm

U.S. stocks recovered from an early slide Thursday, placing the market on course to break a five-day losing streak. Gains in technology companies, banks and industrial stocks outweighed losses among big retailers, homebuilders and utilities. Energy stocks rose along with crude oil.

European indexes finished mostly lower as the British pound slumped amid discord over a new deal for Britain's departure from the European Union next Spring. A disorderly exit could result in economic disruption for Britain and threaten London's status as a global financial hub.

KEEPING SCORE: The S&P 500 index rose 20 points, or 0.8 percent, to 2,722 as of 3:49 p.m. Eastern Time. The Dow Jones Industrial Average gained 140 points, or 0.6 percent, to 25,221. The Nasdaq composite climbed 102 points, or 1.4 percent, to 7,239. The Russell 2000 index of smaller companies picked up 17 points, or 1.2 percent, to 1,519. The benchmark S&P 500 has declined five straight days.

THE QUOTE: "We're going back and forth between days when investors are taking risk off and days when they're taking risk back on," said Jason Pride, chief investment officer of private clients at Glenmede. "We're probably going to go through a period of this basically because it's hard for investors to figure out where we are at this stage of the economic cycle."

US-CHINA TRADE: Thursday's market rebound coincided with a report from the Financial Times saying that the United States' trade representative, Robert Lighthizer, has said that a planned escalation in January of U.S. tariffs on imported goods from China are now on hold.

"This bit of information helped to move the market higher today, especially technology stocks," said Quincy Krosby, chief market strategist at Prudential Financial.

The Trump administration has imposed a 10 percent tariff on $200 billion of Chinese goods over complaints Beijing steals or pressures foreign companies to hand over technology as the price of market access. That tariff had been due to rise to 25 percent in January. Another $50 billion of Chinese goods already is subject to 25 percent duties. Beijing has responded with penalty duties on $110 billion of American goods.

Washington and Beijing resumed talks over their spiraling trade dispute this week ahead of a meeting between Presidents Xi Jinping and Donald Trump, China's Commerce Ministry said Thursday.

MARKET LEADER: Technology sector stocks accounted for much of the market's gain. Cisco Systems rose 5.4 percent to $46.74 a day after the company reported quarterly results that topped Wall Street's forecasts.

BANKING ON BANKS: Financial sector stocks rebounded Thursday after taking heavy losses a day earlier. Bank of America gained 2.2 percent to $27.82.

INDUSTRIALS RALLY: Flowserve was among the big gainers in the industrial sector. The stock added 3.8 percent to $49.06.

ROTTEN RETAIL: Several big retailers slumped. Dillard's slid 14.9 percent to $62.80 after the retailer's quarterly earnings fell far short of what investors were expecting. Macy's gave up 3.1 percent to $32.19. Nordstrom dropped 3.5 percent to $58.97.

HOUSE OF PAIN: KB Home had its steepest drop in more than three years after the homebuilder said new-home orders are down sharply in its current quarter versus a year ago. The Los Angeles-based company's revenue projection for the quarter also fell below analysts' estimates. The stock plunged 16.4 percent to $17.40. Shares in other major homebuilders also skidded. Lennar declined 5.2 percent to $39.45, while PulteGroup lost 1.7 percent to $24.12.

While a strong economy and job market helped boost home sales earlier this year, rising mortgage rates and home prices are becoming hurdles for many would-be buyers. The annual rate of new U.S home sales has dropped 15.3 percent since May, eliminating much of the strength in sales from the first five months of 2018.

BIG DECLINER: Pacific Gas & Electric's stock price continued to get pummeled Thursday. The stock, which was on course for a six-day losing streak, was the biggest decliner in the S&P 500 index.

Investors are concerned over whether the power company can sustain potential losses related to the blaze that devastated the Northern California town of Paradise, killing at least 56 people. PG&E is facing a lawsuit claiming it is responsible for the blaze, which started Nov. 8 and has charred nearly 200 square miles.

The company's stock price has plunged 60 percent since Nov. 8, wiping out $15 billion of the company's market value. Another utility, Edison International, is down about 30 percent in the same period.

PG&E's stock was down 29.5 percent to $18.04 in afternoon trading. Edison's shares were off 7.4 percent to $49.91.

ENERGY: Oil prices closed higher for the second straight day. Benchmark U.S. crude rose 0.4 percent to settle at $56.46 a barrel in New York. Brent crude, used to price international oils, gained 0.8 percent to close at $66.62 a barrel in London. Despite the latest pickup, U.S. crude oil is still down about 13.5 percent for the month. The average price for a gallon of gasoline in the U.S. has dropped to $2.67 from $2.89 a month ago, according to AAA.

Natural gas, which spiked Wednesday amid forecasts calling for a cold snap across much of the Northeast and South, slumped 16.5 percent to $4.04 per 1,000 cubic feet.

In other energy trading, heating oil fell 1 percent to $2.07 a gallon and wholesale gasoline slid 0.3 percent to $1.56 a gallon.

Energy stocks got a boost from the pickup in oil prices. Noble Energy gained 3.2 percent to $25.52.

BOND YIELDS: Bond prices rose. The 10-year Treasury fell to 3.11 percent from 3.12 percent late Wednesday.

CURRENCIES: The dollar rose to 113.58 yen from 113.51 yen on Wednesday. The euro strengthened to $1.1348 from $1.1338. The pound weakened to $1.2791 from $1.3038.

METALS: The price of gold gained 0.7 percent to $1,210.10 an ounce. Silver also rose 0.7 percent to $14.08 an ounce. Copper added 0.9 percent to $2.71 a pound.

OVERSEAS: Major European stock indexes closed mostly lower following a flare-up in discord over British Prime Minister Theresa May's plan for Britain's departure from the European Union next year. She persuaded a majority in her Cabinet to back an agreement that would allow Britain to stay in a customs union while a trade treaty is negotiated, but the deal faces an uncertain fate in Parliament and two of her Cabinet ministers, including the Brexit minister, resigned in protest.

The disarray surrounding the process sent the pound lower and hit British bank stocks. Barclay's slid 5.7 percent to $8.49 and Royal Bank of Scotland plunged 10.3 percent to $5.85.

Germany's DAX dropped 0.5 percent and France's CAC 40 shed 0.7 percent. London's FTSE 100 rose 0.1 percent. In Asia, Hong Kong's Hang Seng added 1.7 percent and Tokyo's Nikkei 225 gave up 0.2 percent. Seoul's Kospi gained 1 percent.

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