Belfast Telegraph

Tech and industrial companies lead stocks back from losses

North Korea's latest missile launch jolted the US stock market, but major indexes pulled back from those early losses and mostly finished higher as the weakening dollar gave technology and industrial companies a boost.

Investors bought bonds, which are traditionally considered safe assets, after North Korea fired a midrange ballistic missile that crossed over northern Japan and fell into the Pacific Ocean.

Energy and insurance companies continued to feel the effects of Tropical Storm Harvey, which is dumping record amounts of rain on the Gulf Coast. The Dow Jones industrial average fell 134 points when the market opened.

"It was a double whammy for investors," said Karyn Cavanaugh, senior market strategist at Voya Investment Strategies. But she said investors are unlikely to sell and remain on the sidelines because much of the global economy is growing in sync. That will help company results.

"Buying on the dips is going to continue as long as earnings continue to move forward because investors know the market is going to continue to follow those earnings," she said.

And investors' fears eased as the day went on. As the dollar declined to two-and-a-half-year lows, companies that do a lot of business outside the US climbed. A weaker dollar boosts their sales and helps their profits when they are converted back into dollars.

The Standard & Poor's 500 index rose 2.06 points, or 0.1%, to 2,446.30. The Dow Jones industrial average gained 56.97 points, or 0.3%, 21,865.37. The Nasdaq composite added 18.87 points, or 0.3%, to 6,301.89. The Russell 2000 index of smaller-company stocks picked up 1.45 points, or 0.1%, to 1,383.68. Still, most of the stocks on the New York Stock Exchange fell.

The dollar has weakened in part because a lot of economies in other regions are getting stronger, which boosts their currencies. The dollar is down almost 10% in 2017, at its lowest point in more than a year and the euro is at two-year highs.

Defence contractors climbed. Raytheon advanced 3.87 dollars, or 2.2%, to 182.11 dollars. United Technologies and Rockwell Collins rose after the Wall Street Journal reported that the companies are close to a deal. United Technologies, which makes jet engines, lifts and other products, jumped 3.37 dollars, or 2.9%, to 118.70 dollars and aviation electronics maker Rockwell Collins rose 2.75 dollars, or 2.1%, to 130.74 dollars.

The dollar rose to 109.71 yen from 109.09 while the euro rose to 1.1992 dollars from 1.1979 dollars.

The Gulf Coast region continued to absorb heavy rains and widespread flooding, with Tropical Storm Harvey expected to dump even more rain on the region over the next few days. Tens of thousands of people are seeking refuge in shelters.

On Wall Street, insurers continued to fall as investors wondered if they are facing big losses. MetLife fell 84 cents, or 1.8%, to 46.73 dollars.

Companies that drill for oil in the Gulf or onshore in Texas are falling as investors worry about potential lost production. Anadarko Petroleum gave up 56 cents, or 1.4%, to 40.71 dollars.

Germany's DAX slid 1.5% and the CAC 40 in France fell 0.9%. The FTSE 100 index in Britain lost 0.9%. Asian indexes had a smaller reaction. In Japan, the benchmark Nikkei 225 slid 0.5% and South Korea's Kospi lost 0.2%. In Hong Kong, the Hang Seng shed 0.1%.

AP

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