Stocks shake off a wobbly start to end higher on Wall Street
U.S. stocks overcame a wobbly start to finish higher Thursday, as traders welcomed more corporate quarterly results for the summer that weren’t as bad as Wall Street feared.
The Standard & Poor’s 500 index rose 0.5% after shifting between small gains and losses throughout the morning. The index recouped all of its losses from a day earlier, but remains on track for its first weekly loss after notching a gain in each of the previous three weeks.
The stocks of healthcare companies, banks, and communication services accounted for most of the gains. Energy stocks also rose as the price of U.S. crude oil pushed 1.6% higher. Those gains outweighed losses by technology companies and elsewhere in the market. Treasury yields rose, a sign that investors are feeling better about the economy.
After a downbeat start, stocks wobbled for a bit as traders weighed encouraging new data on weekly U.S. unemployment benefit claims and September home sales. The indexes flipped into the green by midafternoon after House Speaker Nancy Pelosi said that negotiations for another round of economic stimulus were progressing.
The day’s gyrations echo the market’s meandering trading in recent weeks as investors gauge the chances of Washington reaching a deal on more support for the economy. Time is running out to get something done before the election, which has dimmed some of the optimism that Democrats and Republicans will soon strike a bargain on an aid package.
The S&P 500 rose 17.93 points to 3,453.49. The Dow Jones industrial average gained 152.84 points, or 0.5%, to 28,363.66. The Nasdaq composite added 21.31 points, or 0.2%, to 11,506.01.
Smaller-company stocks fared better than the rest of the market. The Russell 2000 small-cap index climbed 26.48 points, or 1.7%, to 1,630.25.
A report Thursday morning showed that 787,000 workers applied for unemployment benefits last week. Although that’s still an incredibly high number relative to history, it’s down from 842,000 the prior week. It also was not nearly as bad as economists were expecting.
Another report showed that sales of previously occupied homes accelerated even more last month than economists expected. Low mortgage rates are driving the action, as is a surge in interest in homes in Lake Tahoe and other resort areas as people look to work from home in more attractive locales, according to the National Assn. of Realtors.
Big companies, meanwhile, continue to report profits for the summer that took a hit from the coronavirus-caused recession. But they’re mostly not as bad as feared.
Align Technology, which makes Invisalign teeth straighteners, surged 35% for the biggest gain in the S&P 500 after its earnings report blew past Wall Street’s expectations. Stronger sales to teenagers helped the company more than triple analysts’ expectations for earnings per share.
The stock’s surge helped drive healthcare to the biggest gain among the 11 sectors that make up the S&P 500.
AT&T strengthened by 5.8% after it reported revenue for the latest quarter that beat analysts’ expectations. Coca-Cola gained 1.4%, and Tesla rose 0.7% after both reported earnings that topped Wall Street’s forecasts.
On the losing end were several Big Tech companies. Amazon fell 0.3% and Apple dropped 1%. Big Tech companies have grown so massive in size that their stock movements have outsized sway on the S&P 500 and other indexes that are based on the market value of companies.
The yield on the 10-year Treasury rose to 0.86% from 0.83% late Wednesday. It’s still close to its highest level since June.
European markets ended mostly lower, and Asian markets were mixed.
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