Stocks notch modest but steady gains; home builders soar
Stocks posted modest gains Tuesday, bringing indexes nearly back to the record levels they reached last week. Home builders rose sharply after a big jump in sales of new homes last month, and Best Buy soared after the electronics retailer reported a surge in profit as online sales increased.
The Dow Jones industrial average rose 17.88 points, or 0.1%, to 18,547.30. The Standard & Poor’s 500 index rose 4.26 points, or 0.2%, to 2,186.90 and the Nasdaq composite rose 15.47 points, or 0.3%, to 5,260.08.
It was another quiet day in trading on Wall Street. Volume on the New York Stock Exchange was again below 3 billion shares, marking one of the slowest days of the year. Monday was the slowest day of 2016. Investors have had little in the way of economic data or company news to react to for the last couple of weeks, and many traders are on vacation in the waning days of summer.
This week’s biggest event is Friday, when Federal Reserve Chairwoman Janet Yellen is to speak at an annual conference of central bankers in Jackson Hole, Wyo. The Fed is not expected to raise interest rates at its September meeting, but Yellen’s comments will be dissected for clues on the likelihood and timing of a future hike.
Investors did respond positively to a survey from the 19-country Eurozone that showed business activity expanded in August at a modest but steady pace. It was a sign that companies were not overly worried about Britain’s decision to leave the European Union. The IHS Markit survey of purchasing managers also reached a seven-month high.
Germany’s DAX closed up 0.9%, France’s CAC-40 rose 0.7% and Britain’s FTSE 100 rose 0.6%.
Stocks also benefited from news that Americans stepped up their purchases of new homes in July at the fastest pace in nearly nine years. Luxury home builder Toll Bros. rose nearly 9%, PulteGroup and Lennar rose roughly 3% each, and Los Angeles company KB Home rose 4.8%.
Best Buy jumped 20% to $39.23 after the retailer reported results that beat analysts’ estimates. Notably, it said sales in stores open at least a year rose last quarter, a sign that the company’s turnaround strategy is working in the face of strong competition from Amazon and other online retailers.
Mylan fell 5% to $45.62, the second-biggest drop in the S&P 500, amid growing outrage over the skyrocketing price increases for the drug maker’s EpiPen product, which is used to treat people who may be suffering from a life-threatening allergic reaction. Republicans and Democrats in Congress have started asking questions about Mylan’s price increases.
Analysts at Citi said in a note Tuesday that the political pressure is likely to continue to weigh on Mylan’s stock, referencing the pressure Valeant Pharmaceuticals faced over the last year when it also had to respond to political pressure over its drug pricing tactics.
U.S. government bond prices were little changed. The yield on the benchmark 10-year Treasury note held steady at 1.55%. The dollar slipped to 100.22 yen from 100.29 yen late Monday. The euro fell to $1.1305 from $1.1323.
Crude oil rose 69 cents to $48.10 a barrel. Brent crude, used to price oil internationally, rose 80 cents to $49.96.
Heating oil rose 1.5 cents to $1.502 a gallon, wholesale gasoline rose 1.5 cents to $1.499 a gallon and natural gas rose 8 cents to $2.761 per 1,000 cubic feet.
Gold rose $2.70 to $1,346.10 an ounce, silver rose 7 cents to $19.07 an ounce and copper fell 3 cents to $2.126 a pound.
2:50 p.m.: This article has been updated with closing prices and additional information.
10:25 a.m.: This article has been updated with more recent prices and additional information.
This article was originally published at 7 a.m.
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