Market report

Bank, Rx sectors pull down stocks

In this Monday, Sept. 26, 2016, file photo, trader James Dresch, center, works on the floor of the New York Stock Exchange.
In this Monday, Sept. 26, 2016, file photo, trader James Dresch, center, works on the floor of the New York Stock Exchange.

NEW YORK -- U.S. stocks skidded Thursday as drug companies and banks absorbed large losses. Drugmakers faced scrutiny over price increases, and banks fell as investors worried about the stability of Deutsche Bank and other financial institutions.

Stocks were slightly lower in morning trading, and they fell hard at 12:30 p.m. Eastern time on renewed concerns about Germany's largest bank. EpiPen-maker Mylan fell after legislators called for an investigation of the company.

The price of oil continued to rise, which sent oil drilling and equipment companies higher. Stocks gave up most of their gains from the last two days.

Quincy Krosby, market strategist for Prudential Financial, said investors don't trust Deutsche Bank's statements about its financial health and they are worried what will happen to the bank and to the broader financial system if Deutsche Bank runs low on capital.

"The market begins to worry about Deutsche Bank and then the relationships Deutsche Bank has with other banks here in the United States," she said.

The Dow Jones industrial average fell 195.79 points, or 1.1 percent, to 18,143.45. The Standard & Poor's 500 index sank 20.24 points, or 0.9 percent, to 2,151.13. The Nasdaq composite dropped 49.39 points, or 0.9 percent, to 5,269.15.

Mylan slumped after a group of senators asked the Department of Justice to investigate whether the drugmaker broke the law when it classified its emergency allergy shot EpiPen as a generic drug, which allowed Mylan to make lower rebate payments to states. Mylan fell $1.75, or 4.4 percent, to $38.47. The stock is down 21 percent since mid-August as the company has come under criticism for repeatedly raising EpiPen's price over the past decade.

Financial stocks slumped on on the Deutsche Bank worries. U.S. regulators are seeking $14 billion to settle legal claims over its sales of mortgage securities. It's also unclear whether the German government would support the bank if it runs low on capital. Deutsche Bank has said it isn't seeking government aid.

Oil prices continued to rise after a 5 percent surge the day before. Energy prices had jumped after the nations of OPEC, which collectively produce more than third of the world's oil, agreed to a small cut in production. The decision was a surprise but something investors had long hoped for. The deal won't be finalized until November.

U.S. crude rose 78 cents, or 1.7 percent, to $47.83 a barrel in New York. Brent crude, the international benchmark, rose 55 cents, or 1 percent, to $49.24 a barrel in London.

Bond prices moved higher. The yield on the 10-year Treasury note fell to 1.56 percent from 1.57 percent.

In other energy trading, wholesale gasoline fell 1 cent to $1.47 a gallon. Heating oil rose 2 cents to $1.51 a gallon. Natural gas fell 4 cents to $2.96 per 1,000 cubic feet.

Germany's DAX lost 0.3 percent. Britain's FTSE 100 climbed 1 percent, and the CAC 40 in France rose 0.3 percent. Japan's benchmark Nikkei 225 index jumped 1.4 percent, and in South Korea the Kospi advanced 0.8 percent. Hong Kong's Hang Seng rose 0.5 percent.

Gold rose $2.30 to $1,326 an ounce. Silver rose 7 cents to $19.19 an ounce. Copper was flat at $2.19 a pound.

The dollar jumped to 101.07 yen from 100.75 yen. The euro inched up to $1.1216 from $1.1214.

Business on 09/30/2016

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