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Saturday 10 June 2017 BUSINESS
A24

Dow, Russell hit highs; US stocks end sideways A look at the total impact of the

By ALEX VEIGA of trading in a mostly nar- ocean picked up 39 cents, pound’s drop around the world
AP Business Writer row range. or 4.6 percent, to $8.81.
Wall Street turned in an un- Despite the day’s big tech Benchmark U.S. crude
even finish Friday as inves- stock slide, more stocks gained 19 cents to close at By The Associated Press
tors unloaded their tech- rose than declined on the $45.83 a barrel in New York. LONDON (AP) — The drop in the British currency on Fri-
nology company shares in New York Stock Exchange. Brent crude, used to price day will have an impact not just on the local economy
favor of energy and finan- U.S. stocks were coming off international oils, added 29 but also on companies from around the world doing
cial stocks. a two-day winning streak, cents to settle at $48.15 a business in the country as well as tourists and shoppers.
The tech-heavy Nasdaq which included a record barrel in London. The pound fell as much as three cents against the dol-
composite, which has out- high for the Nasdaq on Small-company stocks lar, from $1.2950 to $1.2635, after the British election
produced no clear winner. By Friday, it had recovered
slightly to $1.2755.
The drop is not as dramatic as the near 17-cent slide
— from $1.50 to $1.33 — that the currency endured
after Britain voted last year to leave the European
Union, but it is likely to be felt broadly if it is sustained.
Here’s a look at the main effects it could have.

TOURISM
A drop in the pound makes it cheaper for people hold-
ing other currencies to visit Britain — and shop there.
Britain has already seen a surge in tourism since the
pound dropped on the Brexit vote last year. A record
37.6 million people visited Britain last year, spending
22.5 billion pounds ($29 billion), with visits from the U.S.
up more than 10 percent. It’s not just the stay that’s
cheaper. London is one of the biggest destinations for
international shopping, particularly luxury goods, and
the weaker pound has helped sales. Companies like
Burberry have credited tourist shopping for helping to
boost sales.

BRITISH EXPORTS
Trader Kevin Lodewick works on the floor of the New York Stock Exchange, Friday, June 9, 2017. The drop in the pound will help lower the cost of Brit-
Wall Street turned in an uneven finish Friday as investors unloaded their technology company ain’s exports around the world. Retailers tend to have
shares in favor of energy and financial stocks. contracts on imports that span months, if not years,
(AP Photo/Richard Drew) to avoid the uncertainties of fluctuating currencies. So
don’t expect the price of a bottle of Scotch whisky
paced gains by other U.S. Thursday. They were on were among the big gain- to fall overnight. But in the longer-term, as the supply
stock indexes this year, fell track to extend those gains ers, receiving a boost from contracts are renegotiated, a weaker pound will, all
the most. The Standard & early Friday, each at one a stronger dollar following other things being equal, reduce the cost of British
Poor’s 500 index closed point trading above their the British general election. goods sold around the world.
slightly lower. most recent closing highs. A stronger dollar tends to
Even with the sell-off in But then investors began to benefit small-cap stocks, BRITAIN’S COST OF LIVING
technology stocks, the unload technology stocks. because they tend to not The opposite is true for the British: imports for them
Dow Jones industrial aver- The sell-off centered on have as much exposure become more expensive as the pound drops. Some
age and the Russell 2000 the biggest companies in to international markets as things, like oil and car fuel, which are priced interna-
index of small-company the stock market: Apple, large-cap stocks. tionally in dollars, will reflect the pound’s drop quickly
stocks closed higher, each Microsoft, Alphabet and The pound lost more than by edging up. Other things, like foreign cars and food,
setting new highs. Facebook. But the biggest 2 cents versus the dollar af- could take longer as supply contracts get renewed.
“We’re seeing investors decliner was chipmaker ter the Conservatives lost Since the pound’s big fall on last year’s Brexit vote, in-
rotate out of the interna- Nvidia, which lost $10.34, or their majority in Parliament, flation has risen faster than wages across Britain, erod-
tional stocks and into the 6.5 percent, to $149.60. which could send Britain’s ing people’s standard of living. Higher inflation also
U.S. stocks in general,” said Alphabet, Google’s parent negotiations to leave the eats away at the benefits exporters will get from the
Sam Stovall, chief invest- company, fell $34.16, or 3.4 European Union, due to lower pound.
ment strategist at CFRA Eq- percent, to $970.12, while start June 19, into disarray.
uity Research. “And also a Apple slid $6.01, or 3.9 per- The pound weakened to CORPORATE DEALS
rotation out of technology cent, to $148.98. $1.2724 from $1.2943. The British companies become cheaper takeover targets
and into energy, materials “It’s had a good run,” said dollar also strengthened and will find it more expensive to buy foreign com-
and financials.” Scott Wren, senior global to 110.20 yen from 109.94 panies. Since last year’s sharp fall in the pound, British
All told, the S&P 500 index equity strategist for Wells yen late Thursday. The euro companies have been approached and been tak-
fell 2.02 points, or 0.1 per- Fargo Investment Institute. weakened to $1.1195 from en over. Software company Arm Holdings was taken
cent, to 2,431.77. The Dow “People are taking a little $1.1222. over by Japan’s Softbank for $32 billion. More recent-
gained 89.44 points, or 0.4 money off the table.” Corporate deal news also ly, consumer goods giant Unilever has rebuffed a $143
percent, to 21,271.97. The The technology sector fell led to some notable stock billion approach by Kraft Heinz.
Nasdaq declined 113.85 2.7 percent. It remains up moves Friday.
points, or 1.8 percent, to 18.5 percent for the year. DuPont Fabros Technol- COMPANY EARNINGS
6,207.92. Traders also bid up shares in ogy jumped 9.8 percent The British currency’s drop will have an automatic im-
The Russell 2000 picked up energy companies as the after the data real estate pact on company earnings. British multinationals like
6.09 points, or 0.4 percent, price of crude oil rose. investment trust and owner BP or Shell will see their revenues made in other coun-
to 1,421.71. The indexes Helmerich & Payne added of wholesale data centers tries become more valuable when repatriated and
also closed out the week $2.87, or 5.7 percent, to was acquired by another translated back into pounds. For non-British compa-
unevenly after several days $53.27. Rig operator Trans- REIT, Digital Realty Trust. q nies, their revenues in Britain will take a hit. q