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Stocks rise broadly, led by tech firms; Biogen dives

Stocks rise broadly, led by tech firms; Biogen dives
People working on the trading floor of the New York Stock Exchange wear denim Thursday. The dress code was relaxed in honor of the Levi Strauss IPO. (Richard Drew / Associated Press)

Technology companies powered a broad rally for U.S. stocks Thursday, snapping the market’s two-day losing streak.

Apple and chipmakers led the wave of buying, helping drive the technology sector 2.5% higher. The sector is up 21.1% so far this year, well ahead of the Standard & Poor’s 500 index’s 10 other sectors.

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Retailers and industrial companies also notched solid gains, easily offsetting financial firms’ losses.

Levi Strauss soared as the storied jeans maker went public for the second time in its history.

Thursday’s gains erased the market’s modest losses from the day before, when the Federal Reserve said that it expects the U.S. economy to slow and that it no longer expects to raise interest rates this year.

Although investors appeared to be circumspect about the central bank’s economic outlook, any concerns seemed to take a back seat Thursday to the likelihood that the Fed will hold off on raising interest rates.

“Overall, stocks are rallying because interest rates have gone down and we know that the Fed is going to continue to be the market’s friend,” said Karyn Cavanaugh, senior markets strategist at Voya Investment Management. “There’s absolutely no reason not to be in stocks when you have an incredibly dovish Fed that is going to support asset prices.”

The S&P 500 index climbed 30.65 points, or 1.1%, to 2,854.88. The Dow Jones industrial average rose 216.84 points, or 0.8%, to 25,962.51

The Nasdaq composite, which is heavily weighted with technology stocks, climbed 109.99 points, or 1.4%, to 7,838.96. The Russell 2000 index of smaller-company stocks advanced 19.25 points, or 1.2%, to 1,562.41.

Major European stock indexes finished mostly lower.

Despite a couple of downbeat days, the benchmark S&P 500 is closing in on its second straight weekly gain. The benchmark index is up 13.9% so far in 2019. That’s better than its full-year gains in four of the last five years.

Apple climbed 3.7% after analysts at Needham upgraded the technology giant’s stock to a strong “buy,” saying its new services initiatives could attract new users. Apple has made several product announcements this week and has an event scheduled for Monday where presumably more announcements will be made.

Chipmakers rose after Micron Technology issued a strong outlook for the year. Micron jumped 9.6% after it issued quarterly forecasts that topped Wall Street’s estimates and said it expects the memory chip market to recover in the second half of the year.

The upbeat forecast helped lift some of its peers. Nvidia rose 5.5%. Advanced Micro Devices climbed 8.5%.

Olive Garden owner Darden Restaurants climbed 6.9% after it reported earnings that were far better than analysts expected. Darden also raised its profit forecast for the year.

Conagra Brands leaped 12.8% after the packaged-food company beat quarterly profit forecasts on higher prices for some of its products.

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Levi Strauss soared 31.8% after its second IPO in the company’s 166-year history. The jeans maker previously went public in 1971, but the namesake founder’s descendants took it private again in 1985.

The strong demand for shares in Levi, which owns the Dockers and Denizen brands, is a good sign for other companies eyeing an IPO this year, said Erik Davidson, chief investment officer at Wells Fargo Private Bank.

“Particularly since it’s an IPO for a non-tech firm, it probably speaks well of the overall market conditions and investor sentiment,” he said.

Traders were not as keen on rival clothing brand Guess. The company sank 12.5% after giving a disappointing fourth-quarter report and forecast.

Biogen plunged 29.2%, losing more than $17 billion in market value, on news that it stopped a trial for an Alzheimer’s drug. The biotechnology giant and its partner determined that the drug would probably be ineffective.

Financial stocks finished broadly lower for the second straight day, hurt by the prospects for lower interest rates. Fifth Third Bankcorp led the slide, dropping 3.7%.

On Wednesday, banks slumped after the Fed’s outlook for interest rates this year triggered one of Treasury yields’ biggest slides in months.

Bond prices held steady Thursday. The yield on the 10-year Treasury note stayed at 2.53%.

Energy futures prices finished mixed. Benchmark U.S. crude fell 0.4% to $59.98 a barrel. Brent crude fell 0.9% to $67.86 a barrel.

Wholesale gasoline rose 0.2% to $1.92 a gallon. Heating oil dropped 1% to $1.99 a gallon. Natural gas was little changed at $2.82 per 1,000 cubic feet.

Gold rose 0.4% to $1,307.30 an ounce. Silver rose 0.8% to $15.44 an ounce. Copper fell 0.5% to $2.91 a pound.

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