Stocks gain, led by financial shares; drugmakers drop

Stocks edge up, led by financial stocks ; Drugmakers drop on Clinton comments

Associated Press
Stocks gain, led by financial shares; drugmakers drop

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A currency trader talks on the phone near the screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room in Seoul, South Korea, Monday, Sept. 21, 2015. Asian stock markets were mostly lower Monday after concerns about global growth weighed on U.S. and European share prices. (AP Photo/Lee Jin-man)

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NEW YORK (AP) — U.S. stocks rose in the afternoon Monday, recouping some losses from the sell-off last week, as investors tried to look beyond the uncertain timing of a possible interest rate increase by the Federal Reserve. Drugmakers slumped on concern of new regulations for the industry following comments from Democratic presidential front-runner Hillary Rodham Clinton. Chipmaker Atmel jumped after accepting a bid from Britain’s Dialog Semiconductor.

KEEPING SCORE: The Dow Jones industrial average climbed 141 points, or 0.9 percent, to 16,526 as of 3:15 p.m. Eastern time. The S&P 500 rose 12 points, or 0.6 percent, to 1,970 and the Nasdaq composite gained 12 points, or 0.3 percent, to 4,839. THE QUOTE: “Investors who have been buying the dips in recent years have benefited, so perhaps that they’ll use that strategy until it doesn’t work anymore,” said Jack Albin, chief investment officer at BMO Private Bank. FINANCIAL BOUNCEBACK: Comments from Federal Reserve officials over the weekend suggested some still foresee a rate increase this year, and financial companies rallied. Citigroup rose 27 cents, or 0.5 percent, to $50.56. Stocks of financial companies fell Friday over fears that lenders would have to hold off increasing borrowing rates on their customers since the Fed had decided to hold off on hiking rates itself. CASHING IN THE CHIPS: Atmel, a California-based semiconductor company, surged after the company accepted an offer worth about $4.6 billion in cash and stock from Britain’s Dialog Semiconductor. Atmel provides electronics products used in the industrial, automotive, consumer, communications, and computing markets. Its stock jumped 96 cents, or 13 percent, to $8.23. DRUG STOCKS FALL: Major drug companies fell after Democratic presidential front-runner Hillary Rodham Clinton said she will soon outline a proposal for controlling the cost of prescription drugs. Biogen, a maker of specialty drugs, dropped $16.67, or 5 percent, to $298. The tumbling drug shares hit the Dow index hard. Dow-members Pfizer, Merck and Johnson & Johnson all fell. HOME SALES: U.S. home sales slid in August by 4.8 percent from the previous month, the most since January, according to the National Association of Realtors. Solid job growth and low mortgage rates have boosted sales, but home prices are rising faster than incomes. THE QUOTE: “If people were expecting home sales and auto sales to be the bright spots of the economy, they’re going to have to find other reasons to stay bullish,” said James Abate, chief investment officer of Centre Asset Management. Last week, a report showed automakers cut back sharply on production in August.

VW SKIDS: U.S.-traded shares of Volkswagen tumbled 18 percent to $29.89 following allegations that the German carmaker rigged U.S. emissions tests for about 500,000 diesel cars. The Environmental Protection Agency in the U.S. said the company had skirted clean air rules and could faces fines of more than $18 billion.

EUROPE RISING: Britain’s FTSE 100 index rose 0.1 percent while the CAC-40 in France climbed 1.1 percent. Germany’s DAX rose 0.3 percent.

FED IN REAR: The recovery in stocks in Europe and the U.S. comes after the Federal Reserve decided last week to keep its benchmark interest rate on hold, raising concerns about the outlook for global growth. That prompted the biggest drop in two weeks for U.S. stocks.

ENERGY: Benchmark U.S. crude rose $1.81, or 4 percent, to $46.83 per barrel in on the New York Mercantile Exchange. Brent crude, used to price international oils, gained 10 cents to $49.59 in London.

CURRENCIES: The euro was down 1 percent at $1.1195 while the dollar rose 0.6 percent to 120.56 yen.

BONDS: In government bond trading, prices fell. The yield on the benchmark 10-year Treasury note rose to 2.21 percent from 2.13 percent on Friday.