Stocks start the year strong; Nasdaq closes above 7,000 for the first time
Technology and healthcare companies jumped Tuesday as U.S. stocks started the new year the same way they spent the last one: rising steadily and setting records. Energy companies, which struggled in 2017, also climbed.
Asian markets rose after surveys in China and India showed continued manufacturing growth in the world’s most populous countries. U.S. stocks followed suit as investors snapped up shares of companies that should benefit from faster economic growth — including tech, healthcare and materials companies — just as they did last year. The Nasdaq composite closed above 7,000 points, busting through another milestone.
“We’ll continue to see many of the themes from last year play out,” said Kate Warne, an investment strategist for Edward Jones.
Warne said the global economy should keep growing and businesses and consumers around the world will continue to spend more money. It helps that interest rates are low, and governments in areas that reduced their spending during the Great Recession are becoming more willing to spend.
The Standard & Poor’s 500 index rose 22.20 points, or 0.8%, to a record 2,695.81. The Dow Jones industrial average went up 104.79 points, or 0.4%, to 24,824.01. The Nasdaq composite jumped 103.51 points, or 1.5%, to 7,006.90. The Russell 2000 index, which consists of smaller-company stocks, climbed 14.50 points, or 0.9%, to 1,550.51, also a new high.
The Nasdaq had its best opening day since 2013 as the big technology companies that dominated in 2017 got the new year off to a good start. Facebook rose 2.8% to $181.42. Apple advanced 1.8% to $172.26. Chip maker Nvidia climbed 3% to $199.35.
Drug and medical device companies led the healthcare sector higher. Gilead Sciences, which makes drugs for hepatitis C and HIV, rose 3.4% to $74.10. Abbott Laboratories, which sells medications, infant formula and medical devices, ticked up 3% to $58.79. Baxter International, which makes hospital supplies, climbed 3.9% to $67.17.
Retailers also rose. That included Amazon, which advanced 1.7% to $1,189.01. Retailers that struggled last year, including big-box and department stores, also fared well. Target rose 3.9% to $67.63, and Kohl’s rose 3.9% to $56.35. Early indications suggest shoppers had a busy holiday season; investors will look for confirmation of that in the weeks to come.
Bond prices slid. The yield on the 10-year Treasury note rose to 2.46% from 2.41%. The yield on the two-year note rose to 1.92% from 1.89%.
The increase in bond yields weighed down high-dividend stocks such as utilities, household goods makers and real estate companies. Higher bond yields make those stocks less appealing to investors seeking income.
Investors bet that the markets will stay calm, too. The VIX, a measurement of how much volatility investors expect, moved sharply lower. It has been at historic lows since April.
Weight Watchers International jumped 8% to $47.83 after it struck a deal with producer and recording artist DJ Khaled, who will represent the brand to millions of followers on Snapchat, Twitter, Instagram and Facebook. Weight Watchers got a big boost a few years ago from a deal with Oprah Winfrey that also included a substantial investment in the company.
Bitcoin rose after the Wall Street Journal reported that the venture capital firm Founders Fund, co-founded by Peter Thiel, bought about $15 million in bitcoin in mid-2017. The report cited anonymous sources. The digital currency rose 11.1% to $14,901, according to CoinDesk.
Benchmark U.S. crude fell 5 cents to $60.37 a barrel in New York. Brent crude, used to price international oils, fell 30 cents to $66.57 a barrel in London. A rally late last year sent crude oil to its highest price since June 2015.
Natural gas futures climbed 10 cents, or 3.5%, to $3.06 per 1,000 cubic feet. Natural gas is mostly used to heat homes, and demand often rises in frigid weather.
Wholesale gasoline fell 3 cents to $1.76 a gallon. Heating oil fell 1 cent to $2.06 a gallon.
Gold rose $6.80 to $1,316.10 an ounce. Silver rose 6 cents to $17.21 an ounce. Copper fell 2 cents to $3.28 a pound.
The dollar fell to 112.27 yen from 112.64 yen. The euro rose to $1.2055 from $1.2012. The dollar slipped steadily in 2017. The improved global economy was responsible for much of that decline, however, and the weaker dollar makes U.S. exports less expensive in other markets.
In overseas markets, Germany’s DAX fell 0.4%. France’s CAC 40 and the British FTSE 100 each retreated 0.5%. The Hang Seng in Hong Kong gained 2%. Seoul’s Kospi ticked up 0.5%. Markets in Japan were closed for a holiday.
UPDATES:
3:40 p.m.: This article was updated with closing prices, context and analyst comment.
This article was originally published at 7 a.m.
