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BUSINESS Friday 12 July 2019
A25

Dow Jones industrials cross 27,000 points for first time

By ALEX VEIGA and Fastenal slumped on
Associated Press disappointing results.
Technology and big health Corporate earnings will
care sector companies keep investors busy starting
helped drive stocks higher next week, when S&P 500
on Wall Street in midday companies begin report-
trading Thursday, pushing ing results for the April-June
the Dow Jones Industrial quarter.
Average above 27,000 for Companies have been
the first time. lowering expectations
The Dow’s milestone comes for how much profit they
a day after the S&P 500 in- made in the quarter. Wall
dex briefly climbed above Street now projects that
3,000 for the first time and overall S&P 500 company
the Nasdaq composite earnings for the quarter
closed at an all-time high. fell 2.6% from a year ear-
The three major indexes lier, according to FactSet.
were on track to close at As recently as the end of
all-time highs Thursday. March, earnings were fore-
The market shook off a cast to be down only 0.5%.
two-day slide earlier this This could be the first time
week and has been trend- in three years that S&P 500
ing higher as investors have In this July 5, 2019, file photo trader Benjamin Tuchman works at the New York Stock Exchange in companies report a back-
grown more confident that New York. to-back decline in overall
the Federal Reserve may Associated Press earnings.
cut interest rates for the first Chipmaker Nvidia led the they’re baking in that a and other loans higher, DRUG REBATE PLAN
time in a decade as soon technology sector higher, deal gets done with China, making them more profit- SCRAPPED: Drugstore
as the end of this month. climbing 4.4%. that the Fed cuts rates and able for lenders. Goldman chains rose after President
On Wednesday, Fed Chair- Cigna, CVS Health and Unit- remains dovish and then Sachs Group gained 1.8%. Donald Trump withdrew
man Jerome Powell said edHealth Group topped earnings and guidance Despite the gains for big a drug rebate plan that
that many Fed officials be- the gainers in the S&P 500 come in better than ex- health care companies, aimed to reduce the finan-
lieve a weakening global after the White House with- pected,” said Sean Lynch, the sector was down over- cial bite of costly medica-
economy and rising trade drew a drug rebate plan managing director of equi- all. Merck & Co. dropped tions for people on Medi-
tensions have strength- that had aimed to reduce ties at Wells Fargo Private 3.5%. Energy stocks were care. The once-highly pro-
ened the case for a rate the cost of medications for Bank. “We get a hiccup in the biggest laggard. Ci- moted plan from Health
cut. The remarks came as people on Medicare by any one of those, you’ll see marex Energy dropped 1%. and Human Services Sec-
Powell gave testimony be- shifting rebates from insur- a little bit of a pullback in Real estate and materials retary Alex Azar ran into
fore the House Financial ers and distributors to pa- the market.” stocks also fell. opposition within the White
Services Committee. tients. SECTOR BY SECTOR: Retail- Real estate and utilities House. The pushback grew
New data showing con- KEEPING SCORE: The S&P ers and other consumer- stocks also took losses, a after the nonpartisan Con-
sumer prices rose in June 500 rose 8 points, or 0.3%, to focused companies also sign that investors were gressional Budget Office
from a year earlier wasn’t 3,001 as of 12:06 p.m. East- notched gains. Lowe’s Cos. shifting money away from estimated the plan would
expected to give the ern Time. rose 1.6%. Kohl’s added less risky assets. have little impact on man-
Fed reason to reconsider The Dow gained 199 points, 1.2%. Banks also helped EARNINGS PICTURE: Trad- ufacturer prices and would
whether it should lower or 0.7%, to 27,059. The Nas- lift the market. They got ers also weighed a mix of cost Medicare $177 billion
rates, if necessary. Infla- daq composite rebounded a boost from a pickup in corporate earnings reports, over 10 years because it
tion has remained muted after a brief slip, climbing the yield on the 10-year Delta Air Lines and aviation would lead to higher pre-
through much of the econ- 0.3%. Major stock indexes in Treasury note, which rose maintenance company miums subsidized by tax-
omy’s 10 year expansion, Europe fell. to 2.10% from 2.06% late Air notched gains after payers Cigna surged 11.6%,
which Powell has said cited THE QUOTE: “With the mar- Wednesday. When bond their latest quarterly results CVS Health gained 5.5%
as a justification for poten- kets at 27,000 on the Dow yields rise, they push inter- topped Wall Street’s fore- and UnitedHealth climbed
tially lowering rates. and 3,000 on the S&P, est rates on mortgages casts. Bed Bath & Beyond 5.1%..q

Powell again signals Fed is prepared to cut interest rates

By MARTIN CRUTSINGER ing Committee on Thursday was sending his strongest dent has said he has the mote him, something that
Associated Press was identical to the remarks signal yet that the Fed was power to fire Powell or de- legal experts dispute.q
WASHINGTON (AP) — Fed- he delivered Wednesday ready to cut its policy rate,
eral Reserve Chairman Je- before the House Finan- which currently stands in a
rome Powell, testifying for cial Services Committee on range of 2.25% to 2.5%.
a second day before Con- Wednesday. The Fed raised rates four
gress, is delivering the same “Uncertainties around times in 2018, drawing
message: that the central trade tensions and con- the ire of President Don-
bank is prepared to cut in- cerns about the strength ald Trump, who has called
terest rates to support the of the global economy the central bank clueless
economy, raising hopes continue to weigh on the by pursuing needless rate
that the first reduction in U.S. economic outlook,” hikes that have slowed
its key policy rate in a de- Powell said in his opening economic growth and de-
cade could happen later comments. Powell’s re- pressed stock gains. Much
this month. marks on Wednesday sent of Trump’s criticism has fo-
Powell’s prepared testi- stocks surging as investors cused on Powell, his choice
mony to the Senate Bank- believed the Fed chairman as Fed chairman. The presi-