US stocks wobble as phone companies fall, oil prices jump

AP News
|
Posted: Sep 28, 2016 1:51 PM
US stocks wobble as phone companies fall, oil prices jump

NEW YORK (AP) — U.S. stock indexes are little changed Wednesday as dividend-paying stocks skid and health care companies take losses. Energy companies are rising as the price of oil changes course yet again and moves higher. Beer makers AB InBev and Molson Coors are rising after SABMiller's shareholders approved the $103 billion deal that will combine InBev with SABMiller, forming the world's largest brewer.

KEEPING SCORE: The Dow Jones industrial average rose 14 points, or 0.1 percent, to 18,242 as of 1:40 p.m. Eastern time. The Dow was aided by a big gain for heavy machinery maker Caterpillar, which advanced $2.14, or 2.6 percent, to $85.02. The Standard & Poor's 500 index was unchanged at 2,159. The Nasdaq composite lost 2 points to 5,303.

HANGING UP: Phone companies took suffered some of the largest declines. AT&T fell 87 cents, or 2.1 percent, to $40.59 after a UBS analyst downgraded the company to "Neutral" from "Buy." Analyst John Hodulik said profits will get squeezed as the companies offer trade-in deals to try to win customers. He cut his profit forecast for Verizon, which lost 61 cents, or 1.2 percent, to $51.88.

AT&T has climbed 18 percent this year and Verizon has risen 12 percent as investors sought out stocks that pay big dividends while bond yields remain low.

OIL: The price of crude oil gyrated. It started the day higher, then gave up its gains and turned lower, only to change course yet again as investors hoped the nations of the OPEC cartel will strike a deal to limit production and strengthen prices.

Benchmark U.S. crude rose 96 cents, or 2.1 percent, to $45.63 a barrel in New York. Brent crude, the international standard, was up $1.18, or 2.5 percent, to $47.70 a barrel in London. Oil prices jumped 3 percent Monday and then fell 3 percent Tuesday.

Exxon Mobil picked up $1.45, or 1.7 percent, to $84.69 and EOG Resources climbed $2.40, or 2.7 percent, to $90.96 in afternoon trading.

BEERS ALL AROUND: Stockholders in SABMiller approved its combination with AB InBev. That vote was one of the last hurdles in the giant beer merger, which has already been cleared by regulators. Some investors saw their payout shrink after Britain voted to leave the European Union. AB InBev stock rose 93 cents to $132.81. As part of the deal, Molson Coors will gain full ownership of its joint venture with SABMiller, MillerCoors. Its stock climbed $1.40, or 1.3 percent, to $108.93.

JUST DIDN'T DO IT: Nike's profit and sales were stronger than analysts expected, but the athletic apparel maker's stock slipped $2.19, or 4 percent, to $53.15 as investors worried about challenges including slower orders in North America. Credit Suisse analyst Azar Boehm said orders in that market have been slowing down and are now at their slowest pace in five years as competition grows. Nike is down 14 percent this year, more than any other stock on the Dow Jones industrial average.

Nike rival Under Armour picked up 12 cents to $39.31.

SLEEPLESS NIGHTS: Tempur Sealy International tumbled after the company said third-quarter sales aren't meeting its expectations. It cut its guidance and sale it expects revenue to fall as much as 3 percent this year. That suggests sales of no more than $3.12 billion, while FactSet says analysts expected $3.23 billion on average. Tempur Sealy stock dropped $18.32, or 24.6 percent, to $56.14.

SNAPPY DRESSERS: Uniform rental company Cintas reported a bigger profit than analysts expected in its fiscal first quarter and it raised its projections for the year. Cintas stock added $2.86, or 2.5 percent, to $116.29.

DEUTSCHE BANK RELIEF: Deutsche Bank traded higher after the German bank said it will sell a life insurance subsidiary and emphasized it is not seeking government aid. The company is selling its Abby Life unit to Phoenix Life Holdings for about $1.2 billion. Investors have been worrying about Deutsche Bank's ability to pay a $14 billion claim from the U.S. government. Its U.S.-listed stock, which is down by half this year, rose 21 cents, or 1.8 percent, or $12.13 on Wednesday.

BONDS, CURRENCIES: Bond prices edged higher. The yield on the 10-year Treasury note fell to 1.54 percent from 1.56 percent. The dollar rose to 100.59 yen from 100.27 yen and the euro inched down to $1.1206 from $1.1221.

OVERSEAS: The CAC-40 in France added 0.8 percent while Germany's DAX rose 0.7 percent. In Britain, the FTSE 100 gained 0.6 percent. Tokyo's Nikkei 225 index fell 1.3 percent and Hong Kong's Hang Seng was unchanged. Seoul's Kospi added 0.9 percent.

___

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at http://bigstory.ap.org/journalist/marley-jay