September 27, 2017 The Skanner MINORITY BUSINESS ENTERPRISE EDITION Page 9
MBE 2017
Special Business Edition
Small Companies Make Biggest Gains as US Stocks Rise
Smaller, domestically-focused banks and tech and industrial firms made especially large gains
By MARLEY JAY
AP Markets Writer
NEW YORK— U.S.
stocks climbed Wednes-
day as smaller compa-
nies soared following a
report that showed busi-
ness investment climbed
in August. Investors also
hoped stocks will benefit
from tax cuts proposed
by President Donald
Trump and congressio-
nal Republicans.
The Labor Department
said orders for long-last-
ing manufactured goods
rose, and a gauge of busi-
ness investment climbed
for the second month in a
row. Investors hope that
means U.S. manufactur-
ing is getting stronger as
the global economy con-
tinues to improve, and
they bet on continued
growth: technology com-
panies rallied for a sec-
ond day, while the prices
of traditionally safe in-
vestments like bonds and
gold dropped.
“We’ve been wait-
ing for that,” said Kate
Warne, an investment
strategist for Edward
Jones, of the recent im-
provement.
“Business
spending has been rela-
tively weak,” with spend-
ing by consumers keep-
ing the economy afloat.
Smaller,
domestical-
ly-focused banks and
technology and industri-
al firms made especially
large gains, and the Rus-
sell 2000 index of small-
er-company stocks made
its biggest gain since
March. The tax proposal
was similar to what in-
vestors had come to ex-
pect, and with months of
negotiations likely ahead
and key details missing,
it’s not clear what kind
of plan might ultimate-
ly pass. But lower cor-
porate taxes could help
smaller companies more
than large ones.
“A corporate tax cut
tends to be better news
for smaller companies
because they don’t have
as many ways to re-
duce their tax rate,” said
Warne.
The proposal would
cut tax rates for individ-
uals and corporations. It
would lower the top cor-
porate tax rate to 25 per-
cent from its current 35
percent, and also reduces
the number of personal
tax brackets and near-
ly doubles the standard
deduction used by most
Americans.
The Standard & Poor’s
500 index added 10.20
points, or 0.4 percent, to
2,507.04. The Dow Jones
industrial average rose
56.39 points, or 0.3 per-
cent, to 22,340.71. The
Nasdaq composite leaped
73.10 points, or 1.1 per-
cent, to 6,453.26.
The Russell 2000 did
even better and con-
tinued to set records. It
gained 27.95 points, or
1.9 percent, to 1,484.81.
After a sluggish few
months, the Russell has
jumped more than 9 per-
cent since mid-August.
The S&P mid-cap and
small-cap indexes also
climbed.
The Labor Depart-
ment’s report gave in-
vestors hope the econ-
“
Utility company Scana
took its biggest loss in
almost nine years after
state police in South Car-
olina said they are look-
ing into “potential crim-
inality” by the company
after a nuclear plant con-
struction project was
shut down after some $10
billion had already been
spent. Its South Carolina
Electric & Gas unit and
partner Santee Cooper
canceled the project in
July after contractor
Westinghouse filed for
A corporate tax cut tends
to be better news for small-
er companies because they
don’t have as many ways to
reduce their tax rate
omy will keep growing,
and Wall Street bet that
interest rates will keep
rising. The yield on the
10-year Treasury note
climbed to 2.30 percent
from 2.24 percent. That
helped banks, as higher
interest rates mean they
can charge more to lend
money. Bank of Ameri-
ca picked up 60 cents, or
2.4 percent, to $25.41 and
Citigroup rose $1.34, or
1.9 percent, to $72.28.
Meanwhile companies
that pay big dividends
took steep losses. Kimco
Realty, a real estate in-
vestment trust that owns
outdoor shopping cen-
ters, fell 75 cents, or 3.7
percent, to $19.41. House-
hold products maker
Procter & Gamble gave
up $1.78, or 1.9 percent,
to $90.87. Rising bond
yields made government
bonds a more appealing
investment to investors
seeking income.
The dollar got stron-
ger and rose to 112.75
yen from 112.17 yen. The
euro fell to $1.1756 from
$1.1798.
Chipmaker
Micron
Technology had a better
quarter than investors
expected, and its stock
rose $2.81, or 8.5 per-
cent, to $37.09. Facebook
climbed $3.47, or 2.1
percent, to $167.68 and
Google’s parent compa-
ny Alphabet picked up
$22.47, or 2.4 percent, to
$959.90.
Shoe and athletic gear
maker Nike said sales in
the U.S. remained weak
in its first fiscal quarter
and steep discounts con-
tinued to affect its busi-
ness. While its earnings
and revenue were better
than analysts expected,
analysts chalked much
of that up to lower taxes,
stock repurchases, and
spending cuts.
Nike lost $1.03, or 1.9
percent, to $52.67.
bankruptcy.
Scana said it will co-
operate fully with the
inquiry. Its stock sank
$4.35, or 7.8 percent, to a
two-year low of $51.22.
Gold fell to its lowest
U.S. stocks are jumping along with bond yields and interest rates early Wednesday, Sept. 27, 2017, and
technology companies continue to recover some of their recent losses. Athletic gear giant Nike is falling
as investors are concerned about the health of its U.S. business. (AP Photo/Mark Lennihan, File)
in a month. The metal’s
price declined $13.90, or
1.1 percent, to $1,287.80
an ounce. Two weeks ago
gold was at a 12-month
high, but it’s fallen sharp-
ly since then. Silver lost 6
cents to $16.83 an ounce.
Copper rose 1 cent to
$2.93 a pound.
Benchmark U.S. crude
added 26 cents to $52.14 a
barrel in New York while
Brent crude, the stan-
dard for international
oil prices, fell 54 cents,
to $57.90 a barrel in Lon-
don.
Wholesale gasoline fell
4 cents to $1.65 a gallon.
Heating oil remained at
$1.85 a gallon. Natural
gas rose 6 cents to $2.97
per 1,000 cubic feet.
The FTSE 100 index in
Britain rose 0.4 percent
while Germany’s DAX
rose 0.4 percent. The
CAC 40 in France added
0.3 percent. Japan’s Nik-
kei 225 fell 0.3 percent
and South Korea’s Kospi
dipped less than 0.1 per-
cent. Hong Kong’s Hang
Seng index rose 0.5 per-
cent.