Stocks edge up to new records; video game makers jump, but banks skid

U.S. stock indexes finished with small gains Wednesday, setting new record highs, as video game makers gave technology companies a boost and household goods companies rose. However, a recent decline in interest rates continued to put pressure on banks.

“Grand Theft Auto” and “NBA2K” maker Take-Two Interactive Software soared after it reported better-than-expected sales, and Activision Blizzard jumped after it said the newest “Call of Duty” game had a strong debut over the weekend. Technology companies rose for the 10th day in a row. Companies that make and sell household goods, such as Colgate-Palmolive and Wal-Mart, gained ground. Energy companies declined and banks fell again; interest rates have weakened since late October, which makes mortgages and other loans less profitable.

The Standard & Poor’s 500 index rose 3.74 points, or 0.1%, to 2,594.38. The Dow Jones industrial average edged up 6.13 points, or less than 0.1%, to 23,563.36. The Nasdaq composite rose 21.34 points, or 0.3%, to 6,789.12. All three closed at record highs. The Russell 2000 index of smaller-company stocks picked up 2.64 points, or 0.2%, to 1,481.73.

It has now been a year since Donald Trump was elected president, and the S&P 500 has jumped 21%. That’s more than stocks have risen after many recent presidential elections, although it trails the market move after Barack Obama was reelected in 2012. Investors felt stocks would do well under a Trump administration, and so far they have, but there have been some major surprises. The biggest is that stocks in other regions — including Europe, Japan and less developed countries — have done ever better.

“Investors were right to be optimistic post-election, but not because of politics,” said Jason Draho, the head of American tactical asset allocation for UBS Wealth Management.

Trump and congressional Republicans haven’t delivered the big infrastructure spending bill Trump proposed while campaigning, and it’s not clear if they will be able to pass a tax cut that makes a real difference for the economy. But Draho said stocks keep rising because the global economy is doing so well. The economies of the 35 advanced nations in the Organization for Economic Cooperation and Development are all expected to grow this year, and most are gaining steam. Meanwhile, Trump hasn’t had a major effect on international trade agreements, as some investors feared.

“In some ways it’s worked out better than investors have hoped,” Draho said.

Technology companies have climbed almost 40% in the last 12 months including Wednesday’s gains. Take-Two jumped 10.6% to $117.65 after it reported quarterly revenue that blew past Wall Street’s estimates. Analysts said its revenue from online games and digital spending was better than expected. Activision Blizzard climbed 5.9% to $64.44 after it said revenue for “Call of Duty: WWII” topped $500 million in its opening weekend.

Bond prices inched down. The yield on the 10-year Treasury note rose to 2.33% from 2.32%. Yields reached a seven-month high in late October but have slipped since then. Investors expect interest rates to rise a bit more slowly in the future, partly because Trump nominated Jerome H. Powell for Federal Reserve chairman. Powell is expected to take a similar approach to current Fed chief Janet L. Yellen and raise rates at a gradual clip. Some of the other candidates for the job were expected to move faster.

Bank of America fell 1.4% to $26.79 and Comerica fell 1.3% to $76.14. Still, banks are trading around their highest levels in a decade.

Time Warner Cable slumped 6.5% to $88.50 after AT&T said it doesn’t know when its purchase of the media company will close.

Benchmark U.S. crude fell 39 cents to $56.81 a barrel in New York. Brent crude, used to price international oils, fell 20 cents to $63.49 a barrel in London.

Wholesale gasoline rose 1 cent to $1.82 a gallon. Heating oil stayed at $1.92 a gallon. Natural gas rose 2 cents to $3.18 per 1,000 cubic feet.

Gold rose $7.90 to $1,283.70 an ounce. Silver rose 20 cents to $17.14 an ounce. Copper rose 1 cent to $3.10 a pound.

The dollar fell to 113.78 yen from 113.87 yen. The euro rose to $1.1596 from $1.1589.

Germany’s DAX edged up a sliver, the French CAC 40 fell 0.2%, and the FTSE 100 index in Britain rose 0.2%. In Japan, the Nikkei 225 index shed 0.1%. Hong Kong’s Hang Seng retreated 0.3%. The Kospi in South Korea advanced 0.3%.


UPDATES:

3:30 p.m.: This article was updated with closing prices, context and analyst comment.

This article was originally published at 8:15 a.m.

Copyright © 2017, Los Angeles Times
EDITION: California | U.S. & World
57°