Thursday, May 24, 2018
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U.S. stocks slip after German central bank raises doubts about bond-buying

NEW YORK — Stocks fell slightly today as worries flared anew about the European debt crisis.

The Dow Jones industrial average was down 14 points at 13,261 at noon. The Standard & Poor’s 500 was off two points at 1,416. And the Nasdaq composite index was down almost six points at 3,071.

In a report issued today, the German central bank questioned the wisdom of having the European Central Bank buy bonds to help the struggling European economies. It stressed that such purchases could carry “substantial risks.”

Earlier this month, stocks rallied after ECB President Mario Draghi said the bank might buy government bonds of struggling European countries to help lower their borrowing costs.

In the U.S., Lowe’s, the world’s No. 2 home improvement store, missed earnings expectations today. Revenue at stores open at least a year dipped 0.4 percent, and the company cut its outlook for the year. The stock fell 6 percent.

The most valuable company in the world, Apple, became the most valuable company of all time, with a market value of $621 billion, surpassing Microsoft’s record from 1999. Apple stock rose $15.40, or 2.4 percent, to $663.51.

Stocks have been inching up for six weeks. On Friday, both the Dow and the S&P closed just below four-year highs.

Other stocks moving sharply early today included health insurer Aetna, which announced it would buy Coventry Health Care for $5.7 billion as the insurance industry realigns itself to better navigate the health care overhaul.

Aetna rose $1.47, or 4 percent, to $39.51. Coventry climbed $6.61, or 19 percent, to $41.55.

The deal follows the $4.46 billion buyout last month of another insurer by WellPoint Inc., and last year’s acquisition worth nearly $4 billion by Cigna of HealthSpring as it grabbed for a share of Medicare revenue.

Best Buy slid 7 percent after rejecting an offer from its founder and largest shareholder to take the electronics retailer private. The company named Hubert Joly, the former head of global hospitality company Carlson and a turnaround expert, as CEO today.

Facebook gained 36 cents, nearly 2 percent, to $19.41, following a slide last week after some insiders were able to sell stock for the first time since the company’s public trading debut in May. The stock is down about half from its offering price of $38.

In the S&P 500, seven of the 10 main industry groups fell, led by telecommunications and consumer discretionary stocks. Those were down more than 0.5 percent each.

In Europe, stocks were also falling. Greek stocks fell 2 percent. Spain’s main index was off 1 percent.

After the ECB’s Draghi raised the possibility of bond-buying, German Chancellor Angela Merkel, who has resisted easing pressure on struggling countries, made comments that seemed to seem soften her resistance. She said last week that officials would do everything possible to save the euro.

But now investors are not sure the ECB will come to the rescue.

Investors are on edge this week because of a series of meetings among European leaders to discuss the debt crisis. The first of them came early today when the Greek foreign minister met with his German counterpart in Berlin to discuss Greek spending cuts necessary for the country to continue receiving bailout money.

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