Stocks give up gains on FBI email inquiry
NEW YORK — A midday advance on the stock market wilted in afternoon trading Friday after the FBI notified Congress that it will investigate new emails linked to Democratic presidential candidate Hillary Clinton.
The market had started out on a strong note after the government reported that the economy broke out of a slump in the third quarter and grew at the fastest pace in two years.
The early climb was led by industrial, energy and technology companies, which would stand to benefit most from a pickup in economy, but the gains disappeared after the FBI made its announcement about 1 p.m. Eastern. Clinton has led in recent polls, and the surprise development added new uncertainty just a week and a half before the presidential election.
“I think the betting has to be that there’s nothing too damning, but we don’t know,” said Brad McMillan, chief investment officer for Commonwealth Financial Network.
The Dow Jones industrial average closed down 8.49 points, less than 0.1 percent, at 18,161.19. The index was 80 points higher shortly before the new inquiry was disclosed, then went down as much as 74 points in the minutes that followed.
The Standard & Poor’s 500 index dipped 6.63 points, or 0.3 percent, to 2,126.41. The Nasdaq composite slid 25.87 points, or 0.5 percent, to 5,190.10.
Health care companies took the biggest losses by far. Prescription drug distributor McKesson plunged to a three-year low after its revenue fell about $1.5 billion short of estimates. The company slashed its annual outlook because of weaker drug prices, and investors worried that McKesson and its rivals will compete by making bigger cuts in prices.
McKesson tumbled $36.39, or 22.7 percent, to $124.11 and competitor AmerisourceBergen lost $10.36, or 13 percent, to $69.14 while Cardinal Health shed $7.30, or 9.8 percent, to $67.50.
Drugmakers were pummeled on weak earnings. Amgen, the world’s largest biotech drug company, reported solid results for the third quarter and raised its guidance. The company disclosed flat sales of the anti-inflammatory medication Enbrel, its top-selling drug. Enbrel will soon face more competition, which could hurt sales.
Amgen gave up $15.39, or 9.6 percent, to $145.18. It was the stock’s worst one-day loss since October 2000. Drugmaker AbbVie disclosed weak sales and lost $3.86, or 6.3 percent, to $57.60.
Health care stocks are the worst performing part of the market this year. They’re down 6 percent while the S&P 500 is up 4 percent. Their performance compared to the rest of the market has gotten even worse over the last few months.
Industrial stocks including United Technologies, which makes products including jet engines and elevators, and manufacturer Honeywell traded higher.
Amazon sank after its profit came up short of analysts’ estimates. The company also released a weak outlook. The stock is trading at all-time highs and has surged more than 30 percent over the last 12 months. It fell $42.04, or 5.1 percent, to $776.32.
AB InBev cut its annual revenue forecast following weak results from its business in Brazil. The world’s largest beer maker fell $4.62, or 3.8 percent, to $116.84.