Tech stocks drive indexes to new highs
Gains in technology companies helped lift U.S. stock indexes Monday, nudging the market once again into record territory.
The Standard & Poor’s 500 index closed at an all-time high, as did the Dow Jones industrial average. The latest gain extended the Dow’s winning streak to 10 days.
Traders bid up shares in microchip makers and other tech companies. Grocery chains, drugstore operators and other consumer-focused firms also helped lift the market. Energy firms declined the most as the price of crude oil fell. Banks and industrial companies also lagged.
Investors mostly focused on the latest company earnings and deal news.
“Earnings have been strong; particularly revenue growth has come in stronger than initial estimates,” said Quincy Krosby, chief market strategist at Prudential Financial. “And overall the guidance has been strong.”
The S&P 500 index rose 4.08 points, or 0.2%, to 2,480.91. The Dow edged up 25.61 points, or 0.1%, to 22,118.42. The Nasdaq composite climbed 32.21 points, or 0.5%, to 6,383.77. The Russell 2000 index of smaller-company stocks ticked up 1.85 points, or 0.1%, to 1,414.17.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.26% from 2.27%.
Positive economic data and strong company earnings have helped nudge the stock market mostly higher in recent weeks.
Heading into Monday, about 82% of S&P 500 companies had reported quarterly results, with roughly 52% having posted better-than-expected earnings and revenue, according to S&P Global Market Intelligence. Technology companies led all others, with 73% of the sector’s results beating Wall Street’s expectations.
Investors have welcomed the earnings growth, pushing the market further into record territory. That has fueled speculation about how high the market can go before there is a pullback.
“What you want to see is a broad range of stocks pushing the market higher, and what we’re seeing are fewer stocks pushing the market higher,” Krosby said. “That’s not necessarily a prescription for a major pullback, but it’s something to watch. Statistically, August and September tend to be the least hospitable period for the market.”
Technology companies led the market’s gainers Monday. Lam Research rose 3.9% to $155.84. KLA-Tencor rose 3.6% to $92.01.
Energy stocks were on the other end of the spectrum. Pioneer Natural Resources fell 4.2% to $129.64. Newfield Exploration slid 5% to $26.44.
Traders continued to bid up shares in companies whose earnings topped analysts’ forecasts.
Tyson Foods climbed 5.7% to $66.90. The meat processor’s forecasts also pleased investors.
ON Semiconductor jumped 8.1% to $16.33.
Some companies’ results disappointed.
Armstrong Flooring slumped 17.5% to $14.25 after its latest quarterly results fell well short of analysts’ forecasts.
The market welcomed the proposed combination of NxStage Medical and Germany’s Fresenius Medical Care. NxStage, a medical device company, agreed to be acquired by Fresenius for $30 a share in a cash deal valued at about $2 billion. NxStage shares soared 28.2% to $29.67.
Rockwell Collins jumped 6.8% to $127.07 after Reuters reported that United Technologies made an offer to buy the aviation electronics maker.
Alibaba Group rose 3.6% to $158.84 and hotel company Marriott International rose 1.1% to 106.17 after they announced a joint venture aimed at Chinese tourists.
Oil prices fell. Benchmark U.S. crude fell 19 cents, or 0.4%, to $49.39 a barrel. Brent crude, the international standard, fell 5 cents, or 0.1%, to $52.37 a barrel.
In other energy futures trading, wholesale gasoline fell 2 cents to $1.63 a gallon. Heating oil fell 1 cent to $1.64 a gallon. Natural gas rose 3 cents to $2.80 per 1,000 cubic feet.
Gold rose 10 cents to $1,264.70 an ounce. Silver held steady at $16.25 an ounce. Copper rose 2 cents to $2.91 a pound.
The U.S. dollar climbed to 110.72 yen from 110.67 yen. It weakened against the euro, which rose to $1.1793 from $1.1769. The euro was below $1.06 as recently as April, before the dollar began weakening steadily.
Markets in Europe were mixed. Germany’s DAX fell 0.3%, while France’s CAC 40 edged up 0.1%. The FTSE 100 in Britain rose 0.3%. Earlier in Asia, Hong Kong’s Hang Seng index added 0.5%, and South Korea’s Kospi rose 0.1%.
UPDATES:
3:20 p.m.: This article was updated with closing prices, context and analyst comment.
This article was originally published at 1:40 p.m.
