U.S. stocks reversed course from an early slump Thursday and closed higher, breaking a two-day losing streak, after technology and bank shares rallied.
Corporate earnings reporting season is in full swing, and investors have been cautiously assessing results and company statements. The volatile market is still on track for a weekly loss even though the Standard & Poor’s 500 index began the week with a record-high close. The pullback has barely dented the big gains made by every major U.S. index this year, including a 19.5% rise for the S&P 500.
The latest batch of results is providing a better picture of the economy after policy concerns and trade disputes have caused months of ups and downs in the market.
“We’ve been watching the game and now we actually get to see the scorecard,” said Brad McMillan, chief investment officer for Commonwealth Financial Network.
So far, the results have reflected financial strength from banks as the broader economy holds up with solid job growth and consumer confidence.
“The consumers are still making things happen out there, and it’s showing up in the earnings to a surprising degree,” McMillan said.
The S&P 500 index rose 10.69 points, or 0.4%, to 2,995.11. The Dow Jones industrial average edged up 3.12 points to 27,222.97. The Nasdaq composite rose 22.04 points, or 0.3%, to 8,207.24.
IBM rose 4.6% after reporting solid results. The company, along with Apple, helped lift the technology sector to lead the broader gains.
Banks led financial stocks higher. BB&T shares rose 2.8%, and SunTrust Banks rose 2.7%. Both reported earnings that easily beat analysts’ estimates.
Medical equipment makers helped healthcare stocks reverse course after an early loss. Danaher rose 2.4% after reporting solid second-quarter results. Abbott Laboratories and Thermo Fisher each rose 2.3%.
Market indexes were down most of the day after Netflix plunged 10.3% in heavy trading and took other communications companies down with it. The streaming video giant reported a slump in new subscribers that could mean trouble as it faces a new wave of competition from Disney and Apple.
Communications stocks were the day’s biggest losers. Consumer-oriented and energy stocks also fell. Dollar Tree shed 1.9%. Apache lost 3.8%.
Financial results remain a mixed bag for many companies. Only about 13% of S&P 500 companies have reported so far, according to FactSet, and analysts expect profits to fall 2.4% overall when every report is tallied.
Union Pacific shares rose 5.9% after the railroad operator reported profit growth and beat Wall Street forecasts despite hauling less freight. The company cut expenses by 7% during the quarter as shipments fell amid ongoing trade disputes. On Wednesday, rival CSX cut its revenue forecast as it deals with a slowdown in shipments.
Philip Morris International jumped 8.2% after the cigarette maker raised its profit forecast for the year after reporting a solid second quarter.
Genuine Parts fell 4.5% after the maker of automotive parts reported weak quarterly financial results and trimmed its profit outlook. The company said it is experiencing weaker demand in Europe.
Microsoft rose 1.6% after the close of regular trading. The technology company’s quarterly profit, which it reported after the closing bell, beat Wall Street forecasts.
Several other large companies are expected to report results Friday, including American Express and Schlumberger.
Benchmark crude oil fell $1.48 to $55.30 a barrel. Brent crude oil, the international standard, fell $1.73 to $61.93 a barrel. Wholesale gasoline fell 5 cents to $1.83 a gallon. Heating oil fell 3 cents to $1.86 a gallon. Natural gas fell 1 cent to $2.29 per 1,000 cubic feet.
Gold rose $4.80 to $1,426.10 an ounce, silver rose 23 cents to $16.12 an ounce, and copper fell 1 cent to $2.70 a pound.