US, European Stocks Sink Again 12/17 12:34
U.S. stocks are falling in choppy trading, and the S&P 500 is trading at its
lowest in more than a year. Health insurers and hospitals are falling after a
judge in Texas ruled that the 2010 Affordable Care Act is unconstitutional.
Retailers and technology stocks are sinking, and high-dividend companies
including utilities and real estate companies are falling sharply.
NEW YORK (AP) -- U.S. stocks are falling in choppy trading, and the S&P 500
is trading at its lowest in more than a year. Health insurers and hospitals are
falling after a judge in Texas ruled that the 2010 Affordable Care Act is
unconstitutional. Retailers and technology stocks are sinking, and
high-dividend companies including utilities and real estate companies are
KEEPING SCORE: The S&P 500 fell as much as 1.2 percent in morning trading
before making a recovery and briefly turning higher. At 12:45 p.m. it was down
21 points, or 0.8 percent, at 2,578. The Dow Jones Industrial Average lost 206
points, or 0.9 percent, to 23,894. The Nasdaq composite fell 44 points, or 0.6
percent, to 6,866. The Russell 2000 index dipped 10 points, or 0.8 percent, to
The S&P 500 is on track for its lowest close since November 2017. The U.S.
benchmark index has fallen 12 percent since it set a record high in late
September. The Russell 2000 has done significantly worse: it's fallen almost 20
percent since it finished at its last record high at the end of August. Wall
Street calls a 20 percent decline a "bear market," and it's considered a major
The S&P Small Cap 600 index went into a bear market Friday as investors
continue to lose confidence in the U.S. economy's growth prospects. Smaller
companies are considered more vulnerable in a downturn than larger companies
because they are more dependent on economic growth and tend to have higher
levels of debt.
HEALTH SCARE: Hospital operator HCA dropped 2.3 percent to $123.86 while
health insurer UnitedHealth lost 1.4 percent to $261.35. Centene, a health
insurer that focuses on Medicaid and the Affordable Care Act's individual
health insurance exchanges, fell 5.2 percent to $120.86 and Molina skidded 11.3
percent to $116.85.
Many experts expect the ruling will be overturned, but with the markets
suffering steep declines in recent months, investors didn't appear willing to
wait and see.
BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.86
percent from 2.89 percent.
The Federal Reserve is expected to raise interest rates again Wednesday, the
fourth increase of this year. It's been raising rates since over the last three
years, and investors will want to know if the Fed is scaling back its plans for
further increases based on the turmoil in the stock market over the last few
months and mounting evidence that world economic growth is slowing down.
Banks managed some gains Monday despite the downward drift in bond yields,
which makes lending less profitable for banks by forcing interest rates on
loans such as mortgages lower.
Bank of America rose 1.3 percent to $24.81 and Bank of New York Mellon added
1.6 percent to $49.44. Banks have been hammered recently because of investors'
concerns about slowing growth and slower increases in interest rates.
The S&P 500's index of financial stocks is down 9.5 percent in the last
month, worse than any other part of the market. For the year it's down 13.5
percent, much worse than the 3.5 percent decline in the S&P 500.
UK QUESTIONS: British Prime Minister Theresa May said Parliament will vote
Jan. 14 on her deal setting terms for Britain's departure from the European
Union. She canceled a vote on the deal last week because it was clear
legislators were going to reject it. May insists she can save the deal, but
pressure is mounting for either a vote by lawmakers or a new referendum on the
Britain is scheduled to leave the EU in late March, and if it does so
without a deal in place governing their trade and economic relationships, it
could bring huge disruptions to the British and European economies and
OVERSEAS: Germany's DAX lost 0.9 percent. That means the DAX, which
represents Europe's largest single economy, is also in bear market territory.
France's CAC 40 and Britain's FTSE 100 both fell 1.1 percent.
Japan's Nikkei 225 index added 0.6 percent and the Kospi in South Korea
gained 0.1 percent. Hong Kong's Hang Seng was less than 0.1 percent lower. Both
the Kospi and Hang Seng are in bear markets as well.
TRADE TENSIONS: China and the United States clashed again over their
respective trade policies Monday, as China criticized what it calls a
"unilateralist and protectionist" approach to trade. The U.S. ambassador to the
World Trade Organization said those critiques were unwarranted. The two nations
have been embroiled in a dispute over technology policy and other issues for
most of this year. With no end to the conflict in sight, investors are growing
more concerned that the tensions will drag down the already-slowing global
ENERGY: Benchmark U.S. crude fell 1.6 percent to $50.38 a barrel in New
York. Brent crude, used to price international oils, dipped 0.7 percent to
$59.84 a barrel in London.
CURRENCIES: The dollar slipped to 112.81 yen from 113.29 yen. The euro rose
to $1.1354 from $1.1303. The British pound rose to $1.2623 from $1.2579.