Banks and retailers power stocks higher after a wobbly start
Stocks overcame an early stumble and closed broadly higher Wednesday as the market more than made up its losses from a day earlier.
Retailers, healthcare and industrial companies notched solid gains. Financial and energy stocks also helped power the rally.
The two sectors have taken the heaviest losses this month as fear that the U.S. trade war with China is hampering global economic growth roiled markets.
Evidence of investor anxiety could still be found in the bond market, as traders seeking safety snapped up U.S. government bonds. The trend continued to drive long-term bond yields further below short-term ones.
The yield in the 10-year Treasury fell below that of the two-year Treasury on Tuesday and remained lower Wednesday. The 10-year yield slid to 1.47%, down from 1.49% late Tuesday. The two-year dropped to 1.50% from 1.52%.
The S&P 500 rose 18.78 points, or 0.7%, to 2,887.94. The Dow Jones industrial average climbed 258.20 points, or 1%, to 26,036.10. The Nasdaq recovered from an early slide, gaining 29.94 points, or 0.4%, to 7,856.88.
Investors favored smaller company stocks a day after they fell sharply. The Russell 2000 index rebounded 16.67 points, or 1.1%, to 1,472.71.
The market is on track to end the week with a gain after having declined four weeks in a row. Still, with two trading days left in August, the major indexes are down more than 3%.
Recent economic reports have been mixed. The overall economy, as measured by gross domestic product, slowed to an annual growth rate of 2.1% in the April-June quarter from 3.1% in the first quarter. An updated snapshot is due out Friday.
The biggest source of uncertainty for the market and economy is the trade showdown between Washington and Beijing. U.S. and Chinese trade negotiators are due to meet next month in Washington, but neither side has given any indication of offering concessions to break a deadlock. A round of talks last month in Shanghai ended with no sign of progress.
Investors also pored over a mixed batch of corporate earnings reports and outlooks Wednesday.
Tiffany & Co. gained 3% after the luxury jeweler’s second-quarter results beat analysts’ projections and the company reaffirmed its full-year forecast.
Hewlett Packard Enterprise climbed 3.4% after the information technology products and services provider reported earnings that easily beat analysts’ forecasts.
Autodesk slid 6.7% after the software company slashed its full-year forecasts, while Movado Group sank 15% after the watchmaker’s earnings and revenue fell short of Wall Street’s expectations.
Benchmark crude oil rose 85 cents to settle at $55.78 a barrel after the government reported a higher-than-expected drawdown in crude inventories. Brent crude oil, the international standard, rose 98 cents to close at $60.49 a barrel.
Gold slipped $3.20 to $1,537.80 per ounce.
The dollar rose to 106.03 Japanese yen from 105.78 yen on Tuesday. The euro weakened to $1.1079 from $1.1093.
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