On 29 September, 2016 – US stocks tumbled Thursday

But shares mostly gained in Asia and Europe.
United States
United States markets were lower on Thursday, giving up most of their gains from the last two days. The EpiPen maker Mylan and other drug companies faced scrutiny over increases in product prices sending their stocks lower. High-dividend stocks like utilities and real estate companies also retreated. The Dow Jones industrials lost 1.1 percent while the S&P and Nasdaq were 0.9 percent lower.
Mylan dropped after a group of senators asked the Justice Department to investigate whether the drug maker broke the law when it classified its emergency allergy shot EpiPen as a generic drug, which allowed Mylan to make lower rebate payments to states. Other drug companies were lower as investors worried that the government would try to rein in drug-price increases. Merck, Allergan and Alexion Pharmaceuticals tumbled. Apple declined on a broker downgrade.
Companies that drill for oil rose sharply as investors expected them to benefit from higher prices for crude. Devon Energy gained and Helmrich & Payne was higher. But companies that refine oil such as Marathon Petroleum and Valero Energy declined because they would have to pay more money for the oil they refine.
JPMorgan Chase and Goldman Sachs declined. Wells Fargo dropped after its CEO John Stumpf again testified to Congress about the bank’s sales practices. Wells Fargo employees opened as many as two million fake deposit and credit card accounts to meet company sales targets, and legislators said Thursday that the company may have violated federal laws.
ConAgra Foods rose after its profit were better than forecast. The company has sold off several brands to focus on product lines like Chef Boyardee and Hebrew National and it is getting ready to split into two companies. PepsiCo advanced after the company reported strong third-quarter results and raised its annual forecasts.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$4.40 to US$1,318.10. Copper futures were virtually unchanged at US$2.19. WTI spot crude was up 60 US cents to US$47.65. Dated Brent spot crude was up 32 US cents to US$49.01. The US dollar was up against the yen, pound and the Canadian and Australian dollars. However, it declined against the Swiss franc. The currency was unchanged against the euro. The Dollar Index was up 0.1 percent. The yields on both the US Treasury 30 year bond and 10 year note slipped 1 basis point to 2.28 percent and 1.56 percent respectively.
Europe
Most stock indices advanced Thursday, extending the gains of the previous session. However, the markets pared their gains in the afternoon and ended with mixed results. The FTSE was up 1.0 percent and the CAC was up 0.3 percent. However, the DAX and SMI retreated 0.3 percent and 0.7 percent respectively.
OPEC countries agreed to modest oil output cuts at their informal meeting in Algiers on Wednesday — the first such deal since 2008. The surprise announcement sent crude oil prices up which in turn provided a boost to energy stocks. The Bank of Spain said that economic growth this year will be better than expected earlier. Gross domestic product is expected to grow 3.2 percent this year, faster than the 2.7 percent forecast in June.
Commerzbank tumbled after the lender said it would slash 9,600 jobs and suspend dividends as part of a broader revamp exercise. Total and Technip jumped along with Royal Dutch Shell, BP and Tullow Oil. Daily Mail & General Trust advanced. The company, which owns the Daily Mail and several other publications, has warned of further cost cutting after reporting a 4 percent increase in revenues for the 11 months to August on a reported basis.
Capita Group tumbled after it trimmed its forecast for fiscal 2016 results, citing a slowdown in specific trading businesses, certain one-off costs and continued delays in client decision-making. Novo Nordisk was down in Copenhagen after it announced intentions to reduce its workforce by approximately 1,000 employees. Telefonica gained in Madrid after The Wall Street Journal reported that Time Warner and Viacom are among bidders for a potential acquisition of its Argentine television broadcaster.
September Eurozone economic sentiment climbed to an eight-month high in September from a five-month low in the previous month, mainly driven by the improvement in industrial and retailers’ confidence. The economic sentiment index climbed to 104.9 from 103.5 in August. German consumer prices rose at the fastest pace in 16 months during September according to preliminary data. The consumer price index climbed 0.7 percent on the year following 0.4 percent increase in the each of the previous two months. The German jobless rate remained unchanged at a seasonally adjusted 6.1 percent.
Asia Pacific
Most Asian stocks advanced Thursday after bank shares recovered in Europe, US durable goods orders data beat estimates and OPEC members surprised market participants with a preliminary deal to curb output. A final decision on the OPEC agreement for a modest oil output cut will be taken at the next formal meeting that is scheduled for November 30 in Vienna.
The Nikkei was up 1.4 percent and the Topix was 0.9 percent higher. Shares rallied on the OPEC deal. They also rallied on the decline in August retail sales — the disappointing 1.1 percent decline pushed the yen lower against both the euro and the US dollar. Energy stocks led advances, with Inpex, Japan Petroleum and JX Holdings all increasing. Hitachi and Mitsubishi Heavy Industries rose on a Nikkei report that the two companies are considering integrating their nuclear fuel business with Toshiba. Takata gained on a Wall Street Journal report that it is in talks with US authorities to resolve allegations of criminal wrongdoing over faulty airbags. Tokuyama jumped after the chemical maker said it would sell its Malaysian subsidiary to South Korea’s OCI as part of its business rehabilitation efforts.
Both the S&P/ASX and All Ordinaries were up 1.1 percent as commodities surged in reaction to the surprise move by OPEC to cut crude output. Energy stocks such as Origin Energy, Santos, Woodside Petroleum and Beach Energy jumped after OPEC members reached a deal to cut oil production for the first time since 2008. Miners BHP Billiton, Rio Tinto and Fortescue Metals Group climbed as Dalian iron ore futures hit three-week high. Shares of Programmed Maintenance Services plunged after the labor hire and maintenance group lowered its FY17 earnings guidance.
The Shanghai Composite was up 0.4 percent despite a Chinese billionaire warning that China’s overheated real estate market is the “biggest bubble in history.” The Hang Seng increased 0.5 percent. The Kospi was up 0.8 percent thanks to capital inflows from foreign investors.
The Sensex dropped 1.6 percent after the Indian Army said it had conducted surgical strikes last night along the LoC in Pakistan, killing several terrorists and causing significant casualties to their hideouts. The sell-off was also fueled by expiry of the near-month derivative contracts.
Looking Forward
Japan posts August consumer price index, household spending, unemployment and industrial production. Germany releases August retail sales and France posts consumer spending on manufactured goods. The UK reports the final estimate of second quarter gross domestic product. The Eurozone releases September flash harmonized index of consumer prices and August unemployment rate. Canada releases its July monthly gross domestic product. In the US, August personal income and spending and September Chicago PMI and consumer sentiment will be reported.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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