Stocks rise despite economic concerns
Healthcare and energy companies helped the U.S. stock market resume its April rally Thursday despite continuing concerns about inflation and interest rates.
The dollar slumped anew, hitting a two-year low against the euro.
The Dow Jones industrial average gained 68.34 points, or 0.6%, to 12,552.96, after sliding 89 points Wednesday.
Shares of MedImmune lifted drug makers and other healthcare issues after the maker of the FluMist spray vaccine hired advisors to explore a sale. MedImmune surged $5.79 to $43.63.
Among other healthcare stocks, AstraZeneca rose 77 cents to $54.55 and Biogen rallied $1.39 to $45.07.
“Things like pharmaceuticals are a play on a slowing economy,” said Robert Schaeffer, a money manager at Becker Capital Management in Portland, Ore. “Traditionally, their earnings have been relatively stable. They have the wind at their back with the baby boomers moving out of middle age.”
Takeover activity also is helping the sector, as MedImmune showed. Nursing home operator Manor Care, which shot up 11% on Wednesday after saying it might sell itself, tacked on $1.13 to $62.81.
Energy stocks rallied as crude oil futures rebounded, rising $1.84 to $63.85 a barrel in New York. The International Energy Agency said the Organization of the Petroleum Exporting Countries had reduced supplies to a two-year low to cut world stockpiles.
Valero Energy jumped $1.28 to $68.66; BP was up $1.41 to $67.41.
But the day’s rally included more than healthcare and energy stocks. Winners topped losers by 2 to 1 on the New York Stock Exchange.
The Standard & Poor’s 500 index rose 8.93 points, or 0.6%, to 1,447.80. The Nasdaq composite was up 21.01 points, or 0.8%, to 2,480.32 -- its highest since Feb. 26, the day before the market began a sharp but brief sell-off.
The market had slumped Wednesday after minutes of the Federal Reserve’s March meeting showed policymakers had agreed that they might have to raise rates further to fight inflation -- despite a slower economy.
But buyers returned Thursday.
“The market is still flush with liquidity, and M&A; [mergers and acquisitions] will continue. That’s a positive driver for stocks,” said Phil Orlando, equity market strategist at Federated Investors in New York.
Among the day’s market highlights:
* Railroad stocks continued to rise on the heels of billionaire Warren E. Buffett’s report Monday that his company raised its stake in Burlington Northern and bought stock in two railroads it didn’t name.
Burlington Northern jumped $4.18 to $91.83, CSX rose $1.42 to $43.14 and Norfolk Southern gained $2.50 to $54.36.
* The euro continued to surge against the dollar, reaching a two-year high of $1.348, up from $1.343 on Wednesday. The prospect of higher European interest rates, amid a strong economy, is boosting the euro: The European Central Bank met Thursday and kept its key interest rate at 3.75% but suggested that the rate would rise in June.
* U.S. bond yields were flat. The 10-year Treasury note was unchanged at 4.73%.
