U.S. stocks are lower Thursday as EpiPen maker Mylan and other drug companies face scrutiny over increases in product prices. Oil prices are little changed after a big surge a day ago, but companies that drill for oil are climbing. A slide in high-dividend stocks like utilities and real estate companies is also pulling the market lower.
KEEPING SCORE: The Dow Jones Industrial Average lost 64 points, or 0.4 percent, to 18,275 as of 11:20 a.m. Eastern time. The Standard & Poor’s 500 slipped 7 points, or 0.3 percent, to 2,164. The Nasdaq composite fell 29 points, or 0.5 percent, to 5,289.
OIL PRICES: Oil prices inched higher Thursday 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 picked up 38 cents to $47.43 a barrel in New York. Brent crude, the international benchmark, added 32 cents to $49.56 a barrel in London.
GUSHER: Companies that drill for oil rose sharply as investors expected them to benefit from higher prices for crude. Devon Energy added $1.81, or 4.3 percent, to $43.39. Companies that provide rigs and other equipment to drillers also rose as investors expected that higher prices will encourage more drilling. Helmrich & Payne rose $3.11, or 5 percent, to $65.89. But companies that refine oil fell on the prospect they will have to pay more money for the oil they refine. Marathon Petroleum fell $2.40, or 5.6 percent, to $40.24 and Valero Energy lost $2.53, or 4.6 percent, to $52.58.
DRUG PRICE WOES: Mylan stock fell 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 stock gave up $1.86, or 4.6 percent, to $38.36. The stock is down 21 percent as Mylan has come under criticism for repeatedly raising EpiPen’s price.
Other drug companies traded lower as investors worry that the government will take action to rein in drug price increases. Merck fell $1.17, or 1.8 percent, to $62.13. Botox maker Allergan dipped $4.95, or 2.1 percent, to $232.83 and Alexion Pharmaceuticals lost $2.20, or 1.8 percent, to $121.56.
THANK GOODNESS: ConAgra Foods rose after its profit surpassed analysts’ forecasts. The company has sold off several brands to focus on product lines like Chef Boyardee and Hebrew National, and it’s getting ready to split into two companies. ConAgra stock rose $3.29, or 7.6 percent, to $46.42.
REFRESHING: PepsiCo climbed after the company reported strong third-quarter results and raised its annual forecasts. While soda consumption in the U.S. has been falling, PepsiCo said it sold more drinks and Frito-Lay snacks in North America. Its stock gained 80 cents to $108.18.
CELL OFF: Intra-Cellular Therapeutics plunged $26.71, or 63.1 percent, to $15.64. The drug developer said an experimental schizophrenia treatment failed in a late-stage clinical trial, as the drug did not work any better than a placebo.
REUNITED? Media companies CBS and Viacom rose after Sumner Redstone’s National Amusements, which controls both companies, said it wants them to combine again. CBS and Viacom had merged in 1999 and split up in 2006. Viacom rose $1.03, or 2.8 percent, to $37.59 and CBS rose 41 cents to $54.56.
BONDS: Bond prices fell. The yield on the 10-year Treasury note rose to 1.58 percent from 1.57 percent. Stocks that pay big dividends lagged the market Thursday, with real estate and utility companies taking some of the largest losses.
FOREIGN MARKETS: Britain’s FTSE 100 climbed 0.8 percent and the CAC 40 in France rose 0.3 percent. Germany’s DAX advanced 0.4 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.
CURRENCIES: The dollar jumped to 101.60 yen from 100.75 yen. The euro edged up to $1.1229 from $1.1214.