Health care stocks lead Wall Street uptick
NEW YORK — Stocks rallied Tuesday, ending a slump that had ushered in the new year.
The Standard and Poor's 500 index climbed the most in three weeks, led by gains for health care stocks. UnitedHealth Group, the nation's largest health insurer, and Johnson & Johnson climbed on recommendations for brokerage firms.
With three straight declines, the S&P 500 would have matched its worst opening of a year since 1978 had it closed lower for a fourth day. The stock market's slow start to 2014 contrasts with last year's exceptional performance, when the S&P 500 climbed to record levels after surging almost 30 percent.
“To me the trend still looks up, even though we've been chopping around,” said Bill Stone, chief investment strategist at PNC Wealth Management Group. The economy “seems to be in the mode that you would expect corporate earnings to continue to grow.”
The S&P 500 rose 11.11 points, or 0.6 percent, to 1,837.88, the biggest gain since Dec. 18. Nine of the 10 sectors that make up the index rose.
The Dow Jones industrial average climbed 105.84 points, or 0.6 percent, to 16,530.94 The Nasdaq composite gained 39.50 points, or 1 percent, to 4,153.18.
UnitedHealth group gained $2.27, or 3.1 percent, to $76.51 when analysts at Deutsche Bank said they expected the nation's largest health insurance company to charge customers more in premiums this year.
Johnson & Johnson climbed $1.96, or 2.1 percent, to $94.29 as analysts at RBC Capital raised their outlook on the stock to “outperform,” in part because of optimism on sales of the diabetes drug Invokana.
Investors were also encouraged by the easy passage in a Senate vote late Monday of Janet Yellen's nomination to take the helm at the Federal Reserve. The vote puts an economist in the post who has backed the Fed's recent efforts to stimulate the economy with low interest rates and huge bond purchases.
The confirmation is a reminder that the Fed's policies of stimulating the economy will likely continue, said Kristina Hooper, U.S. Investment Strategist at Allianz Global Investors.
“It's just a nice little halo effect,” Hooper said.
Investors will get more insight into the Fed's thinking when minutes from the Federal Open Market Committee are released on Wednesday. The Fed announced after its last meeting that it would begin winding down its monthly $85 billion bond-buying program. That stimulus was a major support for last year's rally in stocks.
Despite Tuesday's gains, stocks have started the year off on uncertain footing. Materials companies have declined 1.6 percent so far this year, led by Cliffs Natural Resources. The mining company, which was the second-biggest loser in the S&P 500 last year as commodities prices slumped, is extending its losses.
In government bond trading, the yield on the 10-year Treasury note fell to 2.94 percent from 2.96 percent Monday.
The most important piece of economic news to be released this week will be on Friday when the Labor Department releases its jobs report for December. The report will influence the Fed's decision on how quickly it will reduces its bond purchases in the coming months.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Crazy Mocha owner likes comfort, says shrewd decisions foster growth
- Crude oil tumble signals low gasoline prices this fall
- Atlantic City on hot streak with non-gambling ventures
- Investors shy from Israeli drugmaker Teva amid uncertain Mylan takeover
- No more ‘roar’ as famed trading pits come to an end
- Farm use of drones to take off as feds loosen restrictions
- Pittsburgh’s tech startup activity rates last of 40 metro areas in report
- After years of downsizing, big houses make comeback
- New J.C. Penney CEO comes from middle-income America
- Halliburton to close Indiana County office
- Government contests sale of GE appliance business to competitor Electrolux