Advertisement
Business

Stocks rise for third straight day, boosted by health and tech companies

Donald Himpele Jr.
Specialist Donald Himpele Jr. works at his post on the floor of the New York Stock Exchange on Monday.
(Richard Drew / Associated Press)

Healthcare and technology companies powered stocks broadly higher on Wall Street on Wednesday, giving the market its third straight gain.

Boeing briefly dipped after the United States said it was joining other countries in grounding the company’s 737 Max 8 airplane after the fatal crash of an Ethiopian Airlines jetliner over the weekend. The stock finished the day higher.

The Standard & Poor’s 500 index has now clawed back all its losses from last week, when the benchmark index posted its worst week since December.

The market has rebounded this week even though the costly trade dispute between the United States and China has yet to be resolved and the outlook for corporate earnings growth has dimmed this year.

Advertisement

A batch of economic reports helped drive the latest rally, giving investors more reason to have an upbeat view of the economy. Oil prices rose after new government data showed lower-than-expected stockpiles.

“I’m still scratching my head to find out what kind of an upside catalyst we’ve actually gotten, other than just maybe an aggregate of relatively positive economic reports that individually aren’t enough to move the market,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab. “Frankly, this rally has been much stronger than even that would explain, so I’m a bit puzzled by it.”

The S&P 500 climbed 19.40 points, or 0.7%, to 2,810.92. The Dow Jones industrial average rose 148.23 points, or 0.6%, to 25,702.89.

The Nasdaq composite climbed 52.37 points, or 0.7%, to 7,643.41. The Russell 2000 index of smaller companies ticked up 6.05 points, or 0.4%, to 1,555.88.

Advertisement

The three-day rally has helped the market reclaim the momentum it had in January and February, when it posted the best two-month start to a year since 1991. The S&P 500, Nasdaq, Dow and Russell 2000 are showing double-digit gains for the year so far.

Still, investors are waiting for more details on any potential U.S.-China trade deal. Tariffs have hurt both nations, and investors hope a deal can be struck to at least take some pressure off the global economy, which has shown signs of cooling.

Traders drew encouragement from several economic reports Wednesday.

U.S. wholesale prices notched a slight gain last month after falling for three straight months, a sign there is little inflation pressure in the economy. A report on orders to U.S. factories showed that business investment rose 0.8% after two months of declines, marking the biggest gain since a 1.5% bump in July.

A burst of buying reversed a slide in Boeing shares. The stock briefly headed lower after the U.S. moved to temporarily ground all the aircraft manufacturer’s 737 Max 8 and Max 9 airplanes because of Sunday’s deadly crash of an Ethiopian Airlines 737 Max 8, which killed 157 people. A similar Lion Air plane crashed in Indonesia in October, killing 189 people.

Boeing shares finished the day with a 0.5% gain. The stock slumped more than 11% the first two days of this week. Despite the recent slide, it’s still up 16.9% for the year.

Healthcare-sector stocks notched the biggest gain Tuesday.

Rite Aid jumped 6.1% after the drugstore chain announced a purge of its top management and plans to cut 400 full-time jobs. Chief Executive John T. Standley will step down when the company finds a replacement. Chief Financial Officer Darren Karst and Chief Operating Officer Kermit Crawford are also among the executives leaving the company.

Advertisement

Chipmaker Nvidia advanced 3.8%, leading technology-sector stocks higher. Synchrony Financial rose 2.2% amid a broad financial sector rally.

Canadian marijuana company Aurora Cannabis jumped 13% after it tapped hedge fund manager Nelson Peltz as an advisor. Peltz is the CEO and a founding partner of Trian Fund Management. Aurora said he will help the company explore potential partnerships and advise its global expansion plans.

Oaktree Capital Group surged 12.3% on news that Brookfield Asset Management is buying 62% of the company. The deal creates a combined company with $475 billion in assets and $2.5 billion in annual fee-related revenue, the companies said. The deal includes options that could have Brookfield owning all of Oaktree by 2029.

Vera Bradley surged 21.8% after the luggage and handbag company posted fourth-quarter results that beat Wall Street forecasts and gave a surprisingly good outlook for the year. The company reported lower sales during the quarter, but the results still topped forecasts.

Express skidded 10.1% after the clothing chain reported weak fourth-quarter sales and gave investors a disappointing first-quarter outlook.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.62% from 2.60%.

The dollar fell to 111.05 yen from 111.29 yen on Tuesday. The euro rose to $1.1329 from $1.1297.

U.S. crude oil climbed 2.4% to $58.26 a barrel. Brent crude rose 1.3% to $67.55 a barrel. Wholesale gasoline rose 2.3% to $1.86 a gallon. Heating oil rose 0.3% to $1.99 a gallon. Natural gas rose 1.3% to $2.82 per 1,000 cubic feet.

Advertisement

Gold rose 0.9% to $1,309.30 an ounce. Silver rose 0.3% to $15.46 an ounce. Copper rose 0.2% to $2.94 a pound.


Advertisement