Stocks rise for fourth day in a row, erasing most of last week’s decline
U.S. stocks rose Tuesday for the fourth day in a row as they continued to recover the ground they lost last week. Major indexes approached record highs again.
Most of the gains went to banks, which surged as bond yields jumped. Higher bond yields enable banks to charge higher rates on loans. Banks took steep losses last Wednesday, when stocks had their worst day since September. Scientific instrument companies and drugmakers also rose. However, auto parts companies were hammered after poor third-quarter results from AutoZone. Home builders fell after new home sales sank.
The four-day rally has restored most of the market’s losses, and the Standard & Poor’s 500 index is almost back to record highs.
“The market was simply reminded that there’s political risk out there, and it reacted to that reminder,” said Matthew Peterson, chief wealth strategist for LPL Financial. Peterson said he doesn’t think long-term investors have made big changes to their portfolios in response to last week’s drop, which followed allegations that President Trump asked the FBI to end an investigation into former national security advisor Michael Flynn.
Peterson says high stock prices and the calm market make stocks more vulnerable to surprises from the political arena.
The S&P 500 rose 4.40 points, or 0.2%, to 2,398.42 on Tuesday. The Dow Jones industrial average advanced 43.08 points, or 0.2%, to 20,937.91. The Nasdaq composite edged up 5.09 points, or 0.1%, to 6,138.71. The Russell 2000 index of small-company stocks rose 3.84 points, or 0.3%, to 1,380.98.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.28% from 2.25%. That helped bank stocks such as JPMorgan Chase, which climbed 1.3% to $85.76, and BB&T, which rose 1.5% to $43.03.
Agilent Technologies jumped 4.6% to $58.66 after the maker of scientific instruments posted second-quarter profit and sales that beat Wall Street estimates and raised its annual profit forecast. Industrial and medical device maker Danaher’s stock ticked up 1.3% to $83.95.
AutoZone slid 11.8% to $581.40, its worst one-day loss in more than eight years, after the auto parts retailer said high costs and lower sales at older locations hurt its results. O’Reilly Automotive fell 3.3% to $240.18, and Advance Auto Parts sank 4.6% to $140.66. All have tumbled this year as investors worried about slowing car sales.
Video game publisher Take-Two Interactive Software jumped 5.5% to $72.83 after its quarterly profit and sales surpassed analysts’ expectations. The company’s games include the “Grand Theft Auto” “NBA2K” and “Sid Meier’s Civilization” franchises. Its stock has doubled in value over the last year. Its rival Activision Blizzard rose 1.2% to $57.80, and Electronic Arts rose 0.6% to $109.01.
Sales of new homes fell 11% in April from the month before, the biggest drop in more than two years. Sales had reached a nine-year high in March, and experts said the decline was most likely a blip. Home builder NVR fell 2.6% to $2,296, and D.R. Horton declined 1.6% to $33.37. Home improvement retailer Lowe’s declined 2% to $82.34. Home Depot slipped 0.7% to $154.83.
Nokia’s U.S. shares climbed 5.3% to $6.54 after the company said it settled its legal disputes with Apple. The two companies said that they will work together and that Nokia will get a cash payment from Apple. The Finnish company was once the biggest cellphone maker in the world, but it sold its mobile phone business to Microsoft in 2014 and is now a network infrastructure provider.
Fiat Chrysler sank 4.1% to $10.32 after the U.S. government sued the automaker, saying some of its diesel pickups and Jeep SUVs included software that cheated emissions tests. The Department of Justice said the software let the vehicles’ engines emit more pollution on the road than during Environmental Protection Agency lab testing.
Sears Holdings slipped 0.9% to $7.78 after the struggling retailer announced agreements to reduce its debt and pension obligations.
Benchmark U.S. crude oil rose 34 cents to $51.47 a barrel. Brent crude, used to price international oils, rose 28 cents to $54.15 a barrel.
Wholesale gasoline stayed at $1.66 a gallon, and heating oil was flat at $1.61 a gallon. Natural gas sank 11 cents, or 3.3%, to $3.22 per 1,000 cubic feet.
Gold fell $5.90 to $1,255.50 an ounce. Silver fell 5 cents to $17.14 an ounce. Copper stayed at $2.60 a pound.
The dollar rose to 111.76 yen from 111.20 yen. The euro fell to $1.1185 from $1.1234.
European stocks traded slightly higher. The CAC 40 in France rose 0.5%. Germany’s DAX and the FTSE 100 index in Britain each advanced 0.2%. In Asia, Japan’s Nikkei 225 lost 0.3%, the Hang Seng in Hong Kong rose 0.1% and the South Korean Kospi gained 0.7%.
UPDATES:
2:55 p.m.: This article was updated with closing prices, context and analyst comment.
1:35 p.m.: This article was updated with the close of markets.
This article was originally published at 6:55 a.m.
