Oil Climbs While Banks Slip, Leaving Indexes Little Changed

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U.S. stocks are mixed Wednesday as the price of oil rises to a three-year high but banks decline along with interest rates. Stocks had rallied a day ago on signs that the trade tensions between the U.S. and China were easing. Facebook stock continues to rise as CEO Mark Zuckerberg testifies to Congress about the company’s data privacy scandal.

KEEPING SCORE: The S&P 500 index fell 5 points, or 0.2 percent, to 2,651 as of 1 p.m. Eastern time after it surged 1.7 percent Tuesday. The Dow Jones Industrial Average slid 124 points, or 0.5 percent, to 24,283. The Nasdaq composite held steady at 7,094. The Russell 2000 index of smaller-company stocks rose 4 points, or 0.3 percent, to 1,548.

ENERGY: Energy companies kept rising as the price oil jumped to a three-year high. Benchmark U.S. crude climbed $1.66, or 2.5 percent, to $67.17 a barrel in New York. Brent crude, used to price international oils, gained $1.52, or 2.1 percent, to $72.56 a barrel in London.

Oil prices jumped more than 3 percent Tuesday as investors got more optimistic about a possible resolution to the U.S.–China trade spat. If those talks deteriorate and the countries cut back on trade with each other, it could impede global economic growth and reduce demand for oil.

FACEBOOK FACES CONGRESS: Facebook rose 0.7 percent to $166.23 as CEO Mark Zuckerberg testified before Congress for a second day. Facebook surged during the first part of his testimony Tuesday afternoon and finished the day with a gain of 4.5 percent, its biggest in almost two years.

Daniel Ives, head of technology research for GBH Insights, said there are two reasons for Facebook’s rally. One is that Zuckerberg has done well in his testimony, something investors weren’t sure would happen. The other is that Wall Street feels many members of Congress haven’t been very tough on Facebook, so they’re not worrying as much that they are going to crack down on it and other technology companies.

“A lot of the regulators and politicians don’t really understand Facebook and its (business) model, so how can you expect that regulation is going to be a near-term issue?” he said. “The political theater and grandstanding has actually worked to the benefit of Facebook and Zuckerberg rather than to its detriment.”

The stock is still down about 10 percent since the Cambridge Analytica privacy scandal broke in mid-March. Other social media companies have also rallied rose. Snap, the parent of Snapchat, rose 2.4 percent, to $14.83. Twitter slipped 1.2 percent to $29.17 after a 5.4 percent jump Tuesday.

LOSING GROUND: As investors looked for safer investments, real estate investment trusts and household goods makers traded higher and bond prices climbed. The yield on the 10-year Treasury note fell to 2.78 percent from 2.80 percent.

The lower bond yields put pressure on banks. When bond yields fall, it forces interest rates on mortgages and other kinds of loans lower, meaning lower profits for banks. JPMorgan Chase fell 1.2 percent to $111.15, and Bank of America declined 1.6 percent to $29.99.

DEAL DISAPPOINTMENT: Medical and security imaging equipment maker Analogic agreed to be bought by Altaris Capital Partners for $84 a share, or $1.05 billion. That was much less than investors had hoped for, and the stock dropped 13 percent to $83.55. It spiked from about $84 in March to as much as $96 a share Tuesday on reports the company might be acquired. Analogic noted that its stock was trading at $67 a share in June, when it said it would consider a sale and other options.

EYE ON POLITICS: President Donald Trump tweeted that the U.S. will launch missiles at targets in Syria in response to the recent suspected chemical attack in a rebel-held area that killed at least 40 people. He also tweeted shots at Deputy Attorney General Rod Rosenstein and complained about the Russia probe. He was reportedly so angry about the FBI raid of his personal attorney’s office and hotel room that he is considering firing Rosenstein and special counsel Robert Mueller.

Firing either or both could set off a political firestorm with unclear effects for the Trump administration’s agenda, and while the market has mostly overlooked that kind of political turmoil since Trump took office, it’s showed signs of concern about the uncertainty those steps could create.

PRICES PICK UP: U.S. consumer prices rose 2.4 percent in March from a year earlier. If food and energy prices are excluded, prices have risen 2.1 percent over the last year. That could be a sign of rising inflation, a possibility that has worried investors in recent months. However, the increase also reflects the fact it’s been more than a year since several mobile phone companies introduced unlimited data plans. That kept consumer prices down over the past 12 months.

CURRENCIES: The dollar dipped to 106.70 yen from 107.17 yen. The euro rose to $1.2385 from $1.2361.

KEEPING SCORE: Germany’s DAX lost 0.8 percent, and the CAC 40 in France dropped 0.6 percent. Britain’s FTSE 100 edged 0.1 percent lower.

Japan’s Nikkei 225 stock index lost 0.5 percent and the Kospi in South Korea declined 0.3 percent. Hong Kong’s Hang Seng climbed 0.6 percent.