Stocks edge higher, led by consumer companies and banks
U.S. stocks made small gains Friday morning as banks and consumer products companies traded higher. Beauty products retailer Ulta jumped after it reported strong first-quarter results and raised its projections for the year. Stocks are closing in on their best week since the beginning of March.
The Dow Jones industrial average rose 29 points, or 0.2%, to 17,846 as of 10:16 a.m. Eastern time. The Standard & Poor’s 500 index added 6 points, or 0.3%, to 2,095. The Nasdaq composite index picked up 24 points, or 0.5%, to 4,925. After big gains earlier in the week, stocks are on pace for their biggest weekly advance since the week that started Feb. 29.
The Commerce Department said the U.S. economy was a bit stronger in the first quarter than it initially believed. The agency said the national gross domestic product grew 0.8% in the first three months of the year, above its original estimate of 0.5%. The department said the housing market did better than it thought while business investment and trade wasn’t as bad. Experts think economic growth will pick up in the current quarter and rise to around 2%.
Consumer stocks led the way in the early going. Ulta Salon, Cosmetics and Fragrance posted strong first-quarter results and raised its estimates for the year. Its stock advanced $20.74, or 9.7%, to $234.43.
Vanda Pharmaceuticals climbed after the Food and Drug Administration granted a new marketing approval for its schizophrenia drug Fanapt. The company said it could get additional marketing exclusivity for Fanapt as a result. That could bolster sales of the drug, which was originally approved in 2009. Vanda stock rose 89 cents, or 9.4%, to $10.38.
Machinery maker Terex dropped after Chinese heavy equipment maker Zoomlion abandoned its effort to buy the company. It said the sides had failed to reach a deal after months of talks. Zoomlion offered to buy Terex at the start of the year, after Terex accepted an offer from Finland’s Konecranes. Terex backed out of that agreement and said it will sell its crane business to Konecranes instead. Terex stock lost $4.15, or 17.1%, to $20.18.
Scientific equipment maker Thermo Fisher said it will buy electron microscope maker FEI for $107.50 per share in cash, or about $4.2 billion. The deal comes about two months after Thermo Fisher paid $1.3 billion to buy Affymetrix, a company that makes equipment to analyze genetic codes. FEI stock climbed $12.90, or 13.6%, to $107.48 and Thermo Fisher declined 27 cents to $150.93.
Federal Reserve Chair Janet Yellen is scheduled to discuss interest rates at a Harvard University appearance Friday afternoon, and investors will review her comments closely. The Fed has said it could raise interest rates again in June if economic conditions keep improving, but investors think the central bank is more likely to raise rates in July.
Germany’s DAX was up 0.1% while France’s CAC 40 gave up 0.1%, as did Britain’s FTSE 100. Japan’s benchmark Nikkei 225 index added 0.4% and South Korea’s Kospi gained 0.6%. Hong Kong’s Hang Seng climbed 0.9%.
Benchmark U.S. crude oil lost 40 cents to $49.08 a barrel in New York. Brent crude, which is used to price international oils, gave up 48 cents, or 1%, to $49.69 a barrel in London.
Bond prices held steady and the yield on the 10-year U.S. Treasury note remained 1.83%. The dollar rose to 109.79 yen from 109.72 yen. The euro dipped to $1.1155 from $1.1191.
