Oil and banks take Dow to new highs, but other indexes fall
NEW YORK (AP) — More big gains for Goldman Sachs and Chevron helped pull the Dow Jones industrial average to another record high today even as other indexes continued to slip. Ford and General Motors are rising after they announced strong sales in November. Technology companies and high-dividend stocks are trading lower.
KEEPING SCORE: The Dow gained 66 points, or 0.3 percent, to 19,189 as of 10:45 a.m. Eastern time, above the record it set last week. Goldman Sachs and Chevron contributed 50 points to that gain. The Standard & Poor's 500 index fell 3 points, or 0.1 percent, to 2,195. The Nasdaq composite fell 54 points, or 1 percent, to 5,269 as technology companies like Facebook and Google's parent company, Alphabet, sank. Health care companies slipped.
ENERGY: Oil prices continued to rise and reached their highest since mid-October. Benchmark U.S. crude picked up $1.57, or 3.2 percent, to $51.01 a barrel in New York after it jumped 9.3 percent Wednesday. Brent crude, the standard for pricing international oils, added $1.75, or 2.3 percent, to $53.9 a barrel in London. ConocoPhillips rose 91 cents, or 1.9 percent, to $49.43 and Chevron gained $2.65, or 2.4 percent, to $114.21.
The price of oil had soared Wednesday after the members of OPEC, which collectively produce more than one-third of the world's oil, agreed to a small cut in production starting in January. The price of oil has mostly traded between $40 and $50 a barrel since early April. It dipped as low as $26 a barrel in February.
BANKS: Bond prices continued to fall. That yield on the 10-year Treasury note rose to 2.44 percent from 2.38 percent, its highest since July 2015. That sent bank stocks higher because higher bond yields are linked to higher interest rates, which allow banks to make more money from lending. Bank of America climbed 61 cents, or 2.9 percent, to $21.73 and JPMorgan Chase picked up $1.25, or 1.6 percent, to $81.42.
LOOKS FAMILIAR: Stocks are following the pattern that has held since the presidential election. Banks are rising as investors expect interest rates to increase, which will help banks make more money from lending. Industrial and materials companies are moving higher on the prospect of increased spending on infrastructure. Technology stocks are falling. A strengthening dollar could hurt their sales outside the U.S. Stocks that pay large dividends, like utilities and real estate companies, are also down. Those stocks become less appealing to investors seeking income when bond yields climb.
DOLLAR DOWN: Discount store chain Dollar General said its business was hurting by falling prices for some goods as well as cuts in government benefits that help people with low incomes buy food. The company's results fell short of analyst estimates and its shares lost $5.33, or 6.9 percent, to $71.99. Dollar General hit an all-time high of almost $97 a share this summer but has fallen after two weak quarterly reports.
FILTER DEAL: Parker-Hannifin, which makes motion and control products, said it will pay about $4 billion for Clarcor, a company that makes mobile, industrial and environmental filtration products. That values Clarcor at $83 a share. Its stock jumped $11.95, or 17 percent, to $82.40 while Parker-Hannifin rose $3.84, or 2.8 percent, to $142.77.
IN THE FAST LANE: Automakers were reporting their monthly sales Thursday. Ford gained 80 cents, or 6.7 percent, to $12.76 and General Motors climbed $1.90, or 5.5 percent, to $36.43 after both disclosed stronger sales growth than analysts expected. Auto sales set record highs in 2015 and there have been signs recently that demand is waning.
GUESS NOT: Clothing company Guess slashed its annual guidance as its business in the Americas continues to struggle. It's been trying to make its American business more profitable by closing stores and renegotiating leases, but Guess said it expects weaker sales at older stores. Its stock lost $1.56, or 10.2 percent, to $13.76.
CALVINS STILL FIT: PVH, the owner of the Calvin Klein and Tommy Hilfiger brands, raised its annual guidance after it reported strong results for its international business. Its stock rose $1.79, or 1.7 percent, to $107.73.
CURRENCIES: After a big gain Wednesday, the dollar rose to 114.56 yen from 114.22 yen. The euro dipped to $1.0592 from $1.0599.
OVERSEAS: European stock indexes struggled. In Britain, the FTSE 100 fell 0.9 percent and Germany's DAX fell 0.9 percent. The CAC 40 in France shed 0.4 percent. Japan's Nikkei 225 jumped 1.1 percent and the Kospi of South Korea was little changed. The Hang Seng index in Hong Kong gained 0.4 percent.