Stocks edge up, lifting Dow, S&P and Nasdaq to new records

Wall Street capped a day of mostly listless trading Tuesday with a slight gain, good enough to lift the major U.S. stock indexes to another set of all-time highs.

Banks, insurers and other financial companies led the gainers. Technology firms helped lift the market. Healthcare stocks lagged the most, pulling down insurers, hospital operators and other companies as a Republican effort to repeal the Affordable Care Act — also known as Obamacare — appeared to gain momentum. Oil prices fell.

Trading was subdued overall as investors looked ahead to Wednesday, when the Federal Reserve is expected to deliver an update on the central bank’s view of the economy and the timing of its plans to raise interest rates and shrink its bond holdings.

“People are still, as they usually are the day before a Fed announcement, kind of in a wait-and-see mode,” said Lindsey Bell, investment strategist at CFRA Research.

The Standard & Poor’s 500 index ticked up 2.78 points, or 0.1%, to 2,506.65. The index, regarded as the broadest measure of the stock market, has set a record high three days in a row.

The Dow Jones industrial average rose 39.45 points, or 0.2%, to 22,370.80. The average is on a six-day streak of new highs.

The Nasdaq composite inched up 6.68 points, or 0.1%, to 6,461.32. The tech-heavy index also notched a new high, its first since last Wednesday.

The Russell 2000 index of smaller-company stocks slipped 0.68 points, or 0.1%, to 1,440.40.

The major stock indexes wavered in early trading, but they recovered to hold their small gains by afternoon. Investors sized up new economic data that showed the pace of U.S. home construction slowed in August due to a steep drop in apartment construction. A separate report on business confidence showed CEO optimism had reached its highest level since early 2014.

Mostly, though, investors were focused on what the Fed will say Wednesday.

Forecasters expect the Fed to leave interest rates unchanged for now and stick to plans to raise rates in December. But traders will be listening for word on whether the central bank is ready to begin shrinking its multitrillion-dollar stockpile of bonds.

Such a move would allow the Fed to effectively raise interest rates without touching its key short-term rate, known as the federal funds rate, said Phil Blancato, chief executive of Ladenburg Thalmann Asset Management.

“That’s the most important aspect here,” Blancato said. “That does have an impact on the bond market, and you see the bond market going slightly higher here over the last two days.”

Bond prices fell Tuesday, lifting the yield on the 10-year Treasury note to 2.24% from 2.23%.

Speculation that the Fed will announce plans to unwind its bond portfolio helped lift shares in banks and other financial companies. Such a move by the Fed probably would push up long-term interest rates. Banks benefit from higher rates, which can translate into higher profits from lending money.

U.S. Bancorp shares rose 1.5% to $53.16. Wells Fargo rose 1.2% to $53.36.

Progressive climbed 2.9% to $47.63 after the insurer reported lower-than-expected losses from Hurricane Harvey, which battered Texas and Louisiana last month. The company is the second insurer to report losses related to the hurricane that were far less than financial analysts expected.

Technology stocks were also among the big movers. NetApp climbed 2.7% to $41.71.The sector is the biggest gainer this year, up 26%.

Several health insurers and hospital operators fell after top Senate Republicans said Tuesday that their last-ditch effort to overhaul the Affordable Care Act is gaining momentum.

Envision Healthcare sank 9.6% to $43.11. Humana fell 3.4% to $240.04. Centene, which administers Medicaid programs and sells health plans to the Affordable Care Act’s exchanges, declined 5.1% to $89.78.

Best Buy slid 8% to $52.76 after the nation’s largest consumer electronics chain outlined long-term profit goals that displeased investors.

T-Mobile US climbed 5.9% to $65.42 after CNBC reported that Sprint and T-Mobile are in talks about a potential combination.

Investors welcomed news that Post Holdings, maker of cereals such as Honey Bunches of Oats and Fruity Pebbles, agreed to acquire Bob Evans Farms, a maker of refrigerated side dishes, in a deal worth about $1.53 billion. Bob Evans climbed 6.1%, to $77.41. Post ticked up 0.6% to $86.36.

Traders were less enthused by word that the Federal Trade Commission signed off on a deal for Walgreens Boots Alliance to buy 2,186 Rite Aid stores for $5.19 billion. That amounts to a much smaller deal than the companies originally sought when Walgreens pushed to buy Rite Aid. The companies abandoned that deal following opposition from regulators. Rite Aid shares slid 12.1% to $2.40. Walgreens fell 1.7% to $81.21.

Energy futures declined.

Benchmark U.S. crude fell 43 cents, or 0.9%, to settle at $49.48 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, fell 34 cents, or 0.6%, to close at $55.14 a barrel in London.

Wholesale gasoline fell 1 cent to $1.66 a gallon. Heating oil fell 1 cent to $1.77 a gallon. Natural gas fell 2 cents to $3.12 per 1,000 cubic feet.

In metals trading, gold fell 20 cents to $1,310.60 an ounce. Silver rose 12 cents to $17.28 an ounce. Copper held steady at $2.97 a pound.

The dollar rose to 111.50 yen from 111.47 yen. The euro rose to $1.1997 from $1.1953.

Global shares were mixed Tuesday.

Germany’s DAX was flat, while France’s CAC 40 rose 0.2% and the FTSE 100 index of leading British shares gained 0.3%. In Asia, Japan’s benchmark Nikkei 225 added nearly 2% coming off Monday’s national holiday. Australia’s S&P/ASX 200 edged down 0.1%, while South Korea’s Kospi lost nearly 0.1%. Hong Kong’s Hang Seng fell nearly 0.4%.

UPDATES:

2:25 p.m.: This article was updated with closing prices, context and analyst comments.

1:20 p.m.: This article was updated with the close of markets.

This article was originally published at 7:10 a.m.