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VOL. 41 | NO. 2 | Friday, January 13, 2017

US stock indexes tread water; bond yields climb

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NEW YORK (AP) — Railroad stocks chugged higher Thursday, but drops for utilities and other companies that pay big dividends meant U.S. stock indexes dipped modestly. Treasury yields continued their upward march.

KEEPING SCORE: The Standard & Poor's 500 index fell 5 points, or 0.2 percent, to 2,267 as of 11:15 a.m. Eastern time. The Dow Jones industrial average was down 50 points, or 0.3 percent, at 19,755. The Nasdaq composite index fell 10 points, or 0.2 percent, to 5,546. Indexes have been trading in a tight range: The S&P 500 bounced around the flat line Thursday and has yet to close up or down by more than 0.4 percent for over two weeks.

Three stocks fell for every one that rose on the New York Stock Exchange.

RAIL RALLY: Railroad operators posted some of the biggest gains. CSX led the way with a jump of $6.47, or 17.5 percent, to $43.35. An activist investor is reportedly teaming up with the executive who turned around Canadian Pacific Railway to target CSX.

Union Pacific rose $2.60, or 2.5 percent, to $106.37 after reporting stronger fourth-quarter earnings than expected. Norfolk Southern also rose.

BINGE BUYING: Netflix jumped $7.07, or 5.3 percent, to $140.33 after the video-streaming service reported stronger fourth-quarter earnings than analysts expected and said that it added more customers during the quarter than ever before.

TREASURY YIELDS: Bond yields continued their march higher, and the 10-year Treasury yield rose to 2.47 percent from 2.43 percent late Wednesday. Yields have generally been climbing since Election Day on expectations that President-elect Donald Trump's policies will spur more inflation and economic growth. The 10-year yield is still below its perch above 2.60 percent that it reached in mid-December, but it's well above the 2.09 percent yield it was at a year ago.

DIVIDEND DROPS: Higher yields may lure income investors back to bonds and away from high-dividend stocks. That hurts real-estate investment trusts, which carry some of the biggest dividend yields. REITs in the S&P 500 fell 0.7 percent, the biggest loss of the 11 sectors that make up the index.

ECONOMIC REPORTS: The U.S. economy continues to hum along. Reports released Thursday indicated strength in the labor and housing markets. The fewest number of workers sought unemployment claims last week in 43 years, a sign that corporate layoffs are subsiding.

A separate report showed that homebuilders broke ground on more new homes in December, capping a solid 2016 for the industry. Developers began work on the most new homes and apartments since 2007.

A stronger economy could sway the Federal Reserve to raise interest rates more quickly. It has raised rates twice since 2015 after keeping them at record lows near zero since 2008.

CURRENCIES: The dollar was mixed against its major rivals. It rose to 115.17 Japanese yen from 113.74 late Wednesday, and the euro dipped to $1.0661. But the British pound rose to $1.2320 from $1.2284.

MARKETS ABROAD: In Asia, the Japanese Nikkei 225 index rose 0.9 percent, South Korea's Kospi rose 0.1 percent and Hong Kong's Hang Seng fell 0.2 percent.

In Europe, the German DAX dipped 0.1 percent, the French CAC 40 fell 0.4 percent and the FTSE 100 lost 0.7 percent in London.

COMMODITIES: Benchmark U.S. crude oil rose 39 cents to $52.28 per barrel. Brent oil, the international standard, rose 29 cents to $54.21. Natural gas rose 4 cents to $3.33 per 1,000 cubic feet.

Gold dropped $11.40 to $1,200.70 per ounce, silver fell 34 cents to $16.96 per ounce and copper was flat at $2.61 per pound.

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