Stocks fall as oil prices drag energy companies lower
U.S. stocks are mostly lower Monday as energy companies sink along with the price of oil. Banks are rising along with interest rates, and Bank of America is climbing after a solid second-quarter report. Stocks finished at five-month highs last week as investors remained optimistic about the U.S. economy even as they worried about the trade war between the U.S. and China.
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KEEPING SCORE: The S&P 500 index lost 4 points, or 0.2 percent, to 2,796 as of noon Eastern time. The Dow Jones Industrial Average rose 2 points to 25,022 behind gains for Goldman Sachs, JPMorgan Chase, and Boeing. The Nasdaq composite fell 12 points, or 0.2 percent, to 7,813. The Russell 2000 index of smaller-company stocks declined 10 points, or 0.6 percent, to 1,676.
ENERGY: Crude oil prices sank on reports the U.S. will take a softer stance on countries that import oil from Iran. Reuters reported that Treasury Secretary Steven Mnuchin said the U.S. will consider giving waivers to countries that can't immediately stop buying Iranian oil by early November. Last month the U.S. began pressuring countries to stop buying Iranian oil entirely and officials said there would be no exceptions.
Benchmark U.S. crude fell 3.4 percent to $68.60 in New York. Brent crude, used to price international oils, fell 3.5 percent to $72.66 a barrel in London.
Oil companies also skidded. Exxon Mobil lost 1.2 percent to $82.34 and Marathon Oil retreated 6.3 percent to $20.12.
BANK ON IT: Bank of America's second-quarter profits jumped 33 percent. Like other big banks, it got a big boost from the corporate tax cut that passed at the end of 2017 and from higher interest rates. Bank of America has also been cutting expenses. Its profit and revenue were both better than analysts expected and the stock rose 2.5 percent to $29.26.
Troubled German lender Deutsche Bank jumped 8 percent to $12.14 after it said its earnings will be considerably higher than expected. Deutsche Bank has taken three years of losses based on high costs and big fines and penalties linked to past misconduct. It replaced its CEO in April.
Banks were also helped by an increase in interest rates after the Commerce Department said sales at retailers and restaurants kept rising in June. That's a sign shoppers are still willing to spend even though wages are only growing slightly, and it's a hint the Federal Reserve will likely continue to raise interest rates.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.88 percent from 2.83 percent. High dividend companies like real estate investment trusts fell as investors who wanted income bought bonds instead.
SINK-CLAIR: Tribune Media and Sinclair Broadcast Group both slumped after the Federal Communications Commission said it has concerns about Sinclair's plan to buy Tribune. Right-leaning TV station operator Sinclair has proposed selling some of its own TV stations as part of the $3.9 billion deal, but FCC Chairman Ajit Pai said Sinclair would continue to control them in practice, which would violate the law.
Tribune Media plunged 15 percent to $32.80 and Sinclair sank 5.2 percent to $31.23. Sinclair is already the largest operator of local TV stations in the U.S.
CHINA GROWTH: The Chinese government said economic growth slowed a bit over the last three months. That wasn't a surprise, and the quarter ended before the U.S. and China formally placed tariffs on billions of dollars in imports. But it adds to challenges for the world's second-largest economy as the trade conflict heats up.
China also said it filed a World Trade Organization challenge to the tariff hike President Donald Trump has proposed on $200 billion in Chinese goods.
ALUMINUM SHINING: Arconic, a company that makes aluminum parts for companies in the aerospace and automobile industries, soared after the Wall Street Journal reported that private equity firms are interested in buying it. The stock climbed 10.6 percent to $19.22, which gave Arconic a market value of about $9.3 billion.
When Arconic split from former parent Alcoa in late 2016, investors saw it as a faster-growing business whose stock would probably climb faster than Alcoa's. That hasn't happened, as Alcoa stock has slowly risen after years of struggles, and Arconic has fallen more than 40 percent since mid-January.
AMAZON, AGAIN: Online retail giant Amazon, already trading at record highs, rose 0.9 percent to $1,828.97 on the day of its Prime Day promotion. The company said the deals will last for 36 hours this year, and Amazon is trying to get more shoppers to Whole Foods, the grocery chain it bought last year. Amazon is up 56 percent in 2018 and is responsible for about 19 percent of the total return of the S&P 500 over that time, according to S&P Dow Jones Indices.
DATA DUMPED: Alliance Data Systems, which manages loyalty and rewards programs for retailers, fell 8.1 percent to $223.75 after it said late and delinquent payments increased in the second quarter.
OVERSEAS: Germany's DAX rose 0.2 percent while the CAC 40 in France dipped 0.4 percent. The FTSE 100 index in Britain dropped 0.9 percent. Hong Kong's Hang Seng edged 0.1 percent higher and the Kospi in South Korea fell 0.4 percent.
CURRENCY: The dollar rose to 112.34 yen from 112.30 yen. The euro climbed to $1.1717 from $1.1677.
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jay
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