Stocks rise for the fourth straight day; bank shares jump
U.S. stocks rallied Wednesday, notching their fourth gain in a row as banks climbed along with bond yields. On Wall Street, there were signs that investors were getting a bit less nervous about international trade tensions.
Some of the biggest gains went to industries that have lagged behind the overall market in the last few months, including financial companies. Interest rates rose as bond prices in the U.S. and Europe fell. Rising interest rates mean banks can charge higher rates on mortgages and other consumer loans. Bank of America shares climbed more than 3%.
Multinational companies such as Boeing and McDonald’s also rose. That helped the Dow Jones industrial average make its biggest gain in almost two months.
Worries about international trade disputes have been affecting the market since late February, but Karyn Cavanaugh, senior markets strategist at Voya Investment Management, said investors might have started focusing on the strength of the U.S. economy and continued global growth instead.
“It’s refreshing to see that investors are realizing this is an incredibly good economic backdrop and it’s an incredibly good environment for companies to make money,” she said. “We’re in a sweet spot where we have some growth and low inflation, and investors just don’t want to believe it.”
The Standard & Poor’s 500 index rose 23.55 points, or 0.9%, to 2,772.35. The Dow jumped 346.61 points, or 1.4%, to 25,146.39. The Nasdaq composite rose 51.38 points, or 0.7%, to 7,689.24. The Russell 2000 index of smaller company stocks rose 11.32 points, or 0.7%, to 1,675.95.
The Nasdaq and Russell have set all-time highs each of the last few days.
Tesla surged 9.7% to $319.50, its biggest gain in 2½ years, as investors grow more confident that the maker of electric cars will meet its production targets for the Model 3 sedan. Chairman and Chief Executive Elon Musk said he expects the company will be able to produce 5,000 Model 3s in a single week by the end of this month. The Model 3 is Tesla’s attempt to reach the mass market with a less expensive car. Tesla has struggled to reach that target, and doing so would help the company stem its long-term losses.
Bond prices slipped. The yield on the 10-year Treasury note rose to 2.98% from 2.93%. JPMorgan Chase shares climbed 2.3% to $110.36, and Wells Fargo shares rose 2% to $55.58. Bank stocks have fallen over the last few months even though long-term interest rates have reached their highest levels in years.
Healthcare and basic materials companies, which are essentially flat over the same period, did better than the rest of the market Wednesday. CVS Health rose 2.8% to $65.08. Chemical maker DowDuPont jumped 3.2% to $70.04.
That didn’t mean investors were ready to overlook trade issues altogether.
Brown-Forman, the maker of Jack Daniel’s and other liquors, slumped 6.1% to $52.47. The company said it has concerns about how trade tensions might affect its business. On Tuesday, Mexico announced tariffs on bourbon and other U.S. products, and the European Union may place duties on Kentucky bourbon. The duties are in response to the tariffs on steel and aluminum imports that President Trump imposed last week. Additionally, Brown-Forman’s sales fell short of analyst projections, and costs connected with the creation of a charitable foundation affected its earnings.
Devon Energy climbed 5.6% to $41.51 after it increased its stock buyback authorization and said it will sell its interest in two companies for a total of $3.13 billion. Global Infrastructure Partners will buy its stakes in EnLink Midstream Partners and EnLink Midstream.
Signet Jewelers soared 18.4% to $52.27 after the company posted stronger first-quarter results than expected and said there were signs its sales are stabilizing. The company also maintained its annual forecasts. Signet traded as high as $75 a share in November. Since then it has reported weak sales, announced more store closures and dealt with complications from the sale of its credit portfolio.
Athenahealth, a medical billing software company, climbed 4.2% to $157.44 after it said it was exploring a possible sale. Investor Elliott Management recently offered about $6.5 billion to take Athenahealth private and said it had grown frustrated with the company’s performance. The company also said CEO Jonathan Bush had resigned effective immediately. A few days earlier, the New York Post reported that Bush settled a sexual harassment claim with a former employee several years ago.
Benchmark U.S. crude fell 1.2% to $64.73 a barrel in New York. Brent crude, used to price international oils, inched down to $75.36 a barrel in London.
Wholesale gasoline fell 1.7% to $2.07 a gallon. Heating oil slid 0.7% to $2.13 a gallon. Natural gas rose 0.2% to $2.90 per 1,000 cubic feet.
Gold fell 0.1% to $1,301.40 an ounce. Silver rose 0.9% to $16.69 an ounce. Copper rose 2% to $3.26 a pound.
The dollar rose to 110.19 yen from 109.76 yen. The euro rose to $1.1768 from $1.1715.
The DAX in Germany rose 0.3%, as did the FTSE 100 in Britain. France’s CAC 40 slipped 0.1%. Tokyo’s Nikkei 225 and Hong Kong’s Hang Seng both advanced 0.4%. South Korean markets were closed for a holiday.
2:35 p.m.: This article was updated with closing prices, context and analyst comment.
This article was originally published at 8:20 a.m.