Stocks get a lift from earnings reports; Berkshire Hathaway boosts banks

U.S. stocks finished broadly higher for the third day in a row Monday. Media, retail and technology companies rose, and Warren Buffett’s Berkshire Hathaway led gains for the financial sector.

Most sectors climbed as companies including Facebook and Netflix recovered some of the losses they sustained recently. Investors continued to focus on companies’ quarterly results instead of the escalating trade threats the United States and China made last week.

Company profits have rocketed higher this year thanks to the corporate tax cut and continued economic growth. But in the first quarter investors didn’t always react to that growth because they were worried about the U.S.’ numerous trade disputes. Julian Emanuel, chief equity and derivative strategist for BTIG, said that’s starting to change.

“The skepticism that we had a quarter ago seems, rightly, to be falling by the wayside,” he said.

The Standard & Poor’s 500 index rose 10.05 points, or 0.4%, to 2,850.40, its highest close since Jan. 29. The benchmark index has posted weekly gains five weeks in a row, its longest winning streak in 2018.

The Dow Jones industrial average rose 39.60 points, or 0.2%, to 25,502.18. The Nasdaq composite advanced 47.66 points, or 0.6%, to 7,859.68. The Russell 2000 index of smaller-company stocks climbed 10.94 points, or 0.7%, to 1,684.31.

Facebook helped pull tech companies upward as it climbed 4.4% to $185.69 after the Wall Street Journal reported that Facebook has talked to four major U.S. banks about possibly offering new services through Facebook Messenger.

Results for Berkshire Hathaway were stronger than analysts expected, and the company’s Class B shares climbed 2.9% to $206.06.

Construction and technical services company Jacobs Engineering jumped 7.8% to $72.31 after it gave a strong forecast for its next fiscal year.

Tyson Foods rose 3.3% to $59.64. The poultry and pork processor cut its profit forecast last week in part because of uncertainty surrounding trade policy and rising freight costs. Its stock is down 26% this year.

Consumer products company Newell Brands dropped 14.3% to $22.76. The company said the liquidation of Toys R Us hurt its baby products business. It also said the combination of U.S. tariffs on goods from China and tariffs imposed by the European Union and Canada following the U.S. taxes on imported steel and aluminum could cost it as much as $100 million a year.

The S&P 500 is getting close to its most recent closing high of 2,872, which was set Jan. 26. Emanuel said the index might be at 3,000 now, about 5% higher than it was Monday, if not for the ongoing trade disputes. He said the S&P could reach that mark if the trade disputes end, but added that that stock trading could become volatile this fall if there isn’t progress.

“There is a hope and there is an expectation that you are going to favorably resolve the trade issues,” he said.

Rite Aid dived 9.8% to $1.66 after it forecast a bigger loss for the year because generic drug pricing isn’t shaping up the way it expected.

Later this week, shareholders will vote on the proposed sale of Rite Aid to the Albertsons grocery store chain. The owner of Safeway agreed to buy Rite Aid in February, but two shareholder advisory firms and one major Rite Aid shareholder opposed the deal.

Oil futures gave up most of an early gain, but they still finished higher. Benchmark U.S. crude rose 0.8% to $69.01 a barrel in New York. Brent crude, used to price international oils, rose 0.7% to $73.75 a barrel in London.

Wholesale gasoline remained at $2.07 a gallon. Heating oil climbed 0.6% to $2.14 a gallon. Natural gas rose 0.2% to $2.86 per 1,000 cubic feet.

Regulators in China tightened controls on trading in the yuan in a possible effort to stop its decline against the dollar. The yuan has drifted lower against the dollar since February, which could help Chinese exporters that face higher U.S. tariffs but also raises the risk of capital flowing out of the economy.

The British pound weakened after the U.K.’s trade minister warned that Britain risks leaving the European Union without a deal to avoid tariffs and other trade barriers. The currency fell to $1.2944, its lowest in almost a year, from Friday’s $1.3007.

The dollar rose to 111.40 yen from 111.23 yen. The euro fell to $1.1556 from $1.1578.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.94% from 2.95%.

Gold fell 0.4% to $1,217.70 an ounce. Silver fell 0.7% to $15.35 an ounce. Copper fell 1.2% to $2.73 a pound.

UPDATES:

2:25 p.m.: This article was updated with closing prices, additional context and analyst comment.

This article was originally published at 7:40 a.m.