Stocks close higher, helped by health care companies
NEW YORK — Stocks closed slightly higher Tuesday, boosted by health care companies such as UnitedHealth Group, which helped outweigh steep declines in energy companies.
Tiffany & Co. jumped after it reported better quarterly results than analysts expected.
The Dow Jones industrial average rose 23.70 points, or 0.1 percent, to 19,121.60. The Standard & Poor's 500 index rose 2.94 points, or 0.1 percent, to 2,204.66 and the Nasdaq composite rose 11.11 points, or 0.2 percent, to 5,379.92.
“Notable today is a bit of rotation back into large cap tech stocks that have been lagging,” said Jonathan Krinsky, chief market technician at MKM Partners LLC. “Facebook, Google, Microsoft are all up about 1 percent and financials are also doing a bit better. Those are big sectors in the market, so that's obviously helping.”
Wall Street has risen sharply as a result of President-elect Donald Trump's White House win, helped in part by investor expectations that his plans to increase infrastructure spending, cut corporate taxes and reduce regulation will boost the economy.
“The Trump rally seems to have stalled out to some extent, and I think it's stalled because we're starting to run into valuation concerns,” said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany, N.Y. “He's given some extra life to the recovery and the bull market, but not a lot.”
Health care stocks were a primary driver of the market's upward turn. UnitedHealth, the largest U.S. health insurer, backed its forecast for this year and said it expects its earnings to grow in 2017. That's because of stable medical costs, less exposure to Affordable Care Act health care exchanges and growth for Optum — a business that manages pharmacy benefits, runs clinics and doctors' offices and provides technology services.
The Dow component closed up $5.48, or 3.6 percent, to $157.59.
Other health care stocks also rallied. Alexion Pharmaceuticals rose $6.21, or 5 percent, to $125.59, drugmaker AbbVie rose $2.13, or 3.6 percent, to $61.59. Other insurance companies also posted gains. Aetna rose $3.64, or 2.8 percent, to $132.03. Cigna, Humana and Anthem all closed up more than 1 percent.
Health care stocks also rose after the announcement of Trump's nominee for secretary of Health and Human Services, U.S. Rep. Tom Price of Georgia, who is an adamant opponent of the Affordable Care Act and is likely to head up the Trump's administration's rollback of the law. Analysts at Jeffreys and Morgan Stanley both said this week the Trump administration would be positive for the industry.
After taking a pause Monday, stocks remain in rally mode since the election. However the gains have slowed down in the last week.
In energy, oil prices fell sharply after it seemed like a deal to reduce oil production among OPEC nations was starting to fall apart ahead of their meeting Wednesday. Saudi Arabia's representatives have sounded skeptical while Iran is hesitant to limit its own output as it ramps up production following years of international sanctions.
Energy stocks followed oil prices lower, with oil giants Exxon Mobil and Chevron falling roughly 1 percent each. The energy component of the S&P 500 fell 1.2 percent Tuesday.
Luxury jeweler Tiffany traded higher after the company reported stronger sales in Asia, which countered weaker results from the United States and Europe. Its stock gained $2.46, or 3.1 percent, to $80.60.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.30 percent from 2.31 percent. The dollar rose to 112.33 yen from 112.26 yen. The euro rose to $1.0647 compared with $1.0597 Monday.