Stocks Mixed Early Tuesday 09/25 09:57
U.S. stock indexes are slightly higher Tuesday morning as energy companies
continue to rise with oil prices.
NEW YORK (AP) -- U.S. stock indexes are slightly higher Tuesday morning as
energy companies continue to rise with oil prices. Stock indexes took small
losses the past two days. Facebook is slumping after the co-founders of
Instagram announced that they are resigning from the photo sharing company.
Interest rates continue to rise as investors expect the Federal Reserve to
raise its benchmark rate on Wednesday.
KEEPING SCORE: The S&P 500 index picked up 1 point to 2,920 as of 10:15 a.m.
Eastern time. The Dow Jones Industrial Average rose 40 points, or 0.2 percent,
to 26,602. The Nasdaq composite slid 1 point to 7,991. The Russell 2000 index
of smaller-company stocks gained 2 points, or 0.1 percent, to 1,707.
OIL BOOST: Oil prices continued to rise after a weekend meeting of OPEC and
its allies ended without an increase in oil production. OPEC nations, Russia
and others concluded the balance between supply and demand is "healthy." Oil
prices have also climbed recently because Iran is exporting less oil after the
U.S. withdrew from the international nuclear deal with Iran and put more
sanctions on the country.
Benchmark U.S. crude rose 0.7 percent to $72.55 a barrel in New York. It's
at its highest price in about three months after it peaked at more than $74 a
barrel in July. Brent crude, the standard for international oil prices, rose
0.8 percent to $81.17 a barrel in London. Brent crude is at its highest price
since late 2014.
ConocoPhillips rose 1.7 percent to $78.36 and Philips 66 added 1.4 percent
UNFRIENDED: Facebook fell 2.4 percent to $161.46 after the co-founders of
Instagram said they're resigning. Instagram CEO Kevin Systrom said Monday that
he and Mike Krieger, Instagram's chief technical officer, plan to leave the
photo sharing app in the next few weeks. He gave no explanation. Facebook
bought Instagram for $1 billion in 2012 and it's been a bright spot for
company. It's seen as a more uplifting place than Facebook itself and is
popular with teens and young people, a group Facebook has had trouble keeping
CenturyLink sank 8.2 percent to $21.01 after its chief financial officer,
Sunit Patel, left the company to take a job at T-Mobile. T-Mobile USA is trying
to combine with rival Sprint, and it said Patel will be in charge of mergers
and integration for the company staring on Oct. 1.
T-Mobile dipped 0.2 percent to $68.78.
BONDS: Bond prices kept falling. The yield on the 10-year Treasury note rose
to 3.10 percent from 3.07 percent. The Federal Reserve is meeting Tuesday and
it's almost certain the central bank will raise interest rates on Wednesday.
That would be the third increase this year and would take the benchmark rate to
a range of 2 percent to 2.25 percent, with another boost expected this year and
more to come in 2019.
The Fed has raised rates a total of eight times since late 2015. Before
that, rates stayed at a record low for seven years beginning in 2008 at the
height of the financial crisis.
Stocks usually do well when the Fed starts to raise interest rates because
the higher rates reflect solid economic growth, which is linked to strong
company profits. But that changes as rates go higher and they have a more
dramatic effect in slowing economic growth, a step the Fed takes to fight
MORE DEALS: Drive-in restaurant chain Sonic jumped 19 percent to $43.56
after it agreed to be bought by Inspire Brands, which also owns Arby's and
Buffalo Wild Wings. The purchase values Sonic at $43.50 a share, or $1.57
billion. Inspire Brands is controlled by the private equity firm Roark Capital.
It was known as Arby's until it bought Buffalo Wild Wings in February and
adopted a new name.
Michael Kors said it will pay more than $2 billion for Italian fashion house
Gianni Versace in a deal that was widely expected after recent media reports.
Kors and its competitors have been buying luxury brands to add more glamour to
their businesses. Kors bought the Jimmy Choo shoe brand for $1.35 billion a
little more than a year ago. Kors stock edged up 0.4 percent to $67 after it
dropped 8.2 percent Monday.
Companies around the world have announced $3.26 trillion in deals this year,
according to Dealogic, far above the $2.49 billion in deals that were struck
over the first three quarters of 2017.
CURRENCIES: The dollar rose to 112.86 yen from 112.73 yen. The euro rose to
$1.1790 from $1.1758.
OVERSEAS: The British FTSE 100 index rose 0.6 percent. France's CAC 40
gained 0.2 percent, and the DAX in Germany also rose 0.2 percent.
Tokyo's Nikkei 225 gained 0.3 percent and the Sensex in India slipped 0.1
percent. Markets in Hong Kong and Seoul were closed for holidays.