Stocks inch up the day after sharp losses; GE leaps
U.S. stocks rose a bit Tuesday as technology and consumer-focused companies regained a sliver of their losses from the day before. Oil prices and energy companies jumped as the United States pressed its allies to stop importing oil from Iran.
Coming off their biggest loss since early April, stocks were on track for hefty gains Tuesday but then weakened late in the session. Tech firms such as Apple bounced back after Monday’s abrupt losses. General Electric led industrial companies higher after it said it would shrink even further by spinning off its healthcare business and its oil service unit.
Banks and other financial firms lost ground as bond yields and interest rates remained well off their highs from last month. Makers of household goods also slipped.
Julian Emanuel, chief equity and derivative strategist for BTIG, said the stock market will be volatile as long as investors concentrate on the trade disputes the United States is having with many of its biggest trading partners.
“The economy is strong as it stands now and earnings are great, but when all of the psychic energy and all of the focus is on the trade war, as it was in late March and early April, the market has responded accordingly,” he said.
The Standard & Poor’s 500 index rose 5.99 points, or 0.2%, to 2,723.06. It fell 1.4% on Monday. The Dow Jones industrial average edged up 30.31 points, or 0.1%, to 24,283.11. The Nasdaq composite advanced 29.62 points, or 0.4%, to 7,561.63 after it plunged 2.1% on Monday. The Russell 2000 index climbed 11.02 points, or 0.7%, to 1,668.53.
A senior State Department official said the Trump administration wants allies to stop importing oil from Iran. If they do, that would increase demand for oil from other countries, which probably would produce more to pick up the slack. Benchmark U.S. crude rose 3.6% to $70.53 a barrel in New York. Brent crude, used to price international oils, rose 2.1% to $76.31 a barrel in London.
President Trump withdrew the U.S. from the Iran nuclear deal in May, so sanctions on Iran’s energy sector will kick in again in November. The State Department official said the U.S. is telling Asian and European governments that they should eliminate their oil imports from Iran before the grace period expires Nov. 4.
Exxon Mobil shares rose 1.1% to $80.64. Chevron climbed 1.3% to $124.16.
Apple climbed 1.2% to $184.43 and Facebook advanced 1.3% to $199. Technology stocks were hammered Monday as investors reacted to reports that the Trump administration might bar technology companies from selling certain high-tech products to China and other countries and limit investment in tech companies by Chinese firms. Stocks recovered some of those losses after a top U.S. trade advisor rebutted those reports.
Consumer-focused companies also rose. Amazon advanced 1.7% to $1,691.09, and Netflix rose 3.9% to $399.39, regaining ground after Monday’s decline. Home builder Lennar climbed 4.9% to $51.61 after a strong quarterly report, and its competitors climbed too.
It has been five months since the S&P 500 and Dow last closed at record highs. The S&P 500 is down 5.2% since Jan. 26, and the Dow has fallen 8.8%. But the tech-heavy Nasdaq and the Russell 2000, which contains smaller and more domestically focused companies, last closed at record highs Wednesday.
Emanuel said investors’ decision to shift money into smaller companies might lead to headaches later because those stocks are more volatile than the larger and more multinational companies in the S&P 500.
“This whole notion of small caps being a safe haven is really a head-scratcher,” he said.
GE jumped 7.8% to $13.74 after the company said it will sell its two-thirds stake in Baker Hughes and divest its healthcare business. GE has sold numerous major businesses in recent years, including its railroad locomotive division, lending unit, its appliance businesses and its stake in NBC. On Monday it agreed to sell its gas-engine business to Advent International for $3.25 billion.
Tuesday was the first day in 110 years that General Electric wasn’t part of the Dow. Walgreens Boots Alliance took GE’s place in the blue-chip index.
Bond prices were little changed. The yield on the 10-year Treasury note remained at 2.88%. Banks continued to fall, as lower interest rates reduce the profits banks can make on mortgages and other types of loans.
In commodities trading, gold fell 0.7% to $1,259.90 an ounce. Silver fell 0.5% to $16.25 an ounce. Copper rose 0.2% to $2.99 a pound.
Wholesale gasoline rose 1.1% to $2.07 a gallon. Heating oil rose 1.4% to $2.13 a gallon. Natural gas rose 0.5% to $2.94 per 1,000 cubic feet.
The dollar rose to 110.13 yen from 109.45 yen. The euro fell to $1.1650 from $1.1704.
Germany’s DAX lost 0.3% and the French CAC 40 fell less than 0.1%. The FTSE 100 in Britain jumped 0.4%. Japan’s benchmark Nikkei 225 index rose less than 0.1%. South Korea’s Kospi and Hong Kong’s Hang Seng both shed 0.3%.
2:25 p.m.: This article was updated with closing prices, context and analyst comment.
1:15 p.m.: This article was updated with the close of markets.
This article was originally published at 7:40 a.m.