Retailers help lift stocks to new records; Best Buy leaps 21%
U.S. stocks climbed for the sixth day in a row Thursday as strong first-quarter results from retailers such as Best Buy and PVH led indexes to record highs. That offset weakness in energy stocks caused by a plunge in oil prices.
Stocks are on their longest winning streak in three months as retailers, technology companies, makers of household products and healthcare firms made large gains.
The Nasdaq composite joined the Standard & Poor’s 500 in setting record highs. While retailers with bricks-and-mortar stores jumped, their online rival Amazon also made a sizable gain as its stock price approached $1,000 for the first time.
Kate Warne, an investment strategist for Edward Jones, said she doesn’t think Thursday’s retail earnings are a sign that business for traditional retailers is getting better.
“It’s probably not something investors should take as a sign of improvement in the retail landscape,” she said. “Consumer spending is actually strong, but consumers are spending in places other than traditional retailers.”
Small companies were mostly left out of the rally, however. And even though OPEC and a group of other oil-producing nations extended their cuts in production, the price of oil fell almost 5% and energy companies took steep losses.
The Standard & Poor’s 500 index rose 10.68 points, or 0.4%, to 2,415.07. The Dow Jones industrial average advanced 70.53 points, or 0.3%, to 21,082.95. The Nasdaq composite jumped 42.23 points, or 0.7%, to 6,205.26, above the record it notched last week. The Russell 2000 index edged up 0.88 of a point, or 0.1%, to 1,383.39.
Best Buy soared 21.5% to $61.25 after the electronics retailer issued a strong first-quarter report, including better sales of mobile devices and gaming products.
PVH, the owner of brands including Calvin Klein and Tommy Hilfiger, climbed 4.8% to $106.98 after it raised its annual forecasts in the wake of its own strong report.
Other retailers — including Guess, Abercrombie & Fitch and Burlington Stores — also made substantial gains. Amazon rose 1.3% to $993.38 after peaking at $999 during the day.
A group of 24 countries including OPEC members and Russia said they will extend their production cuts for nine months in an effort to shore up oil prices. Most analysts expected that, but investors appeared to have gotten their hopes up for a longer extension. And although oil prices have rallied over the last few weeks, experts were skeptical that the deal will do much to boost prices.
Benchmark U.S. crude sank $2.46, or 4.8%, to $48.90 a barrel. Brent crude, the international standard, slid $2.50, or 4.6%, to $51.46 a barrel in London.
Oil-field services company Schlumberger sagged 2.8% to $69.39. Marathon Oil dropped 7.1% to $13.50.
Unlike the other major indexes, the Russell 2000 has not recouped all its losses from Wednesday of last week, the stock market’s worst day of the year. The index is composed of smaller companies that tend to be more U.S.-focused, which means those companies have been hit harder by recent challenges to President Trump’s proposed agenda of reduced taxes and regulations.
Warne, of Edward Jones, said that the U.S. economy’s performance has been mixed lately and that international growth is looking better. That’s helping larger companies that do more business overseas, such as large technology firms, but doesn’t mean as much to smaller companies.
Technology firms made significant gains. Microsoft rose 1.2% to $69.62 . Google parent Alphabet neared the $1,000 mark, rising 1.5% to $969.54. Apple edged up 0.3% to $153.87.
Jack Daniels maker Brown-Forman slumped 5% to $51.60 after it said the company is not for sale and plans to remain under family control. It jumped Monday on reports that Constellation Brands, which makes Corona and Modelo beers, might try to buy Brown-Forman. Constellation Brands rose 0.7% to $180.14.
Spam maker Hormel Foods sank 6.4% to $33.13 as the company said its Jennie-O turkey business continued to struggle in the second quarter. The company’s income and sales fell short of Wall Street projections.
Wholesale gasoline slid 4 cents to $1.61 a gallon. Heating oil fell 6 cents to $1.55 a gallon. Natural gas fell 3 cents to $3.18 per 1,000 cubic feet.
Gold rose $3.30 to $1,256.40 an ounce. Silver rose 8 cents to $17.19 an ounce. Copper rose 1 cent to $2.60 a pound.
Bond prices declined. The yield on the 10-year Treasury note rose to 2.26% from 2.25%.
The dollar fell to 111.80 yen from 111.90 yen. The euro rose to $1.1205 from $1.1195.
Germany’s DAX fell 0.2%, the French CAC 40 slipped 0.1%, and the FTSE 100 index in Britain was unchanged. The Nikkei 225 index in Tokyo climbed 0.4% and Hong Kong’s Hang Seng rallied 0.8%. The Kospi of South Korea jumped 1%.
UPDATES:
2:25 p.m.: This article was updated with closing prices, context and analyst comment.
9:25 a.m.: This article was updated with later market prices and context.
This article was originally published at 7 a.m.
