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Health, tech companies lead U.S. stocks to 3rd straight gain | TribLIVE.com
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Health, tech companies lead U.S. stocks to 3rd straight gain

Associated Press
| Wednesday, March 13, 2019 6:48 p.m
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Trader Edward Curran works on the floor of the New York Stock Exchange, Wednesday, March 13, 2019.
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Trader Michael Urkonis, left, works on the floor of the New York Stock Exchange, Wednesday, March 13, 2019.
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Trader Peter Tuchman laughs as he works on the floor of the New York Stock Exchange, Wednesday, March 13, 2019.
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Specialist Gregg Maloney, left, and trader Robert Moran work on the floor of the New York Stock Exchange, Wednesday, March 13, 2019.
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Gregory Rowe works on the floor of the New York Stock Exchange, Wednesday, March 13, 2019.
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Traders gather at the post that handles Oaktree Capital Group on the floor of the New York Stock Exchange, Wednesday, March 13, 2019.

Health care and technology companies powered stocks broadly higher on Wall Street on Wednesday, giving the market its third straight gain.

Boeing briefly dipped, but finished slightly higher, after the United States said it was joining other countries in grounding the company’s 737 Max 8 airplane following a fatal crash of an Ethiopian airliner over the weekend.

The S&P 500 has now clawed back all its losses from last week, when the benchmark index posted its worst week since December.

The market has rebounded this week even though the costly trade dispute between the U.S. and China has yet to be resolved and the outlook for corporate earnings growth has dimmed this year.

A batch of economic reports helped drive the latest rally, giving investors more reason to have an upbeat view of the economy. Oil prices rose after new government data showed lower-than expected stockpiles.

“I’m still scratching my head to find out what kind of an upside catalyst we’ve actually gotten, other than just maybe an aggregate of relatively positive economic reports that individually aren’t enough to move the market,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. “Frankly, this rally has been much stronger than even that would explain, so I’m a bit puzzled by it.”

The S&P 500 gained 19.40 points, or 0.7 percent, to 2,810.92. The Dow Jones Industrial Average rose 148.23 points, or 0.6 percent, to 25,702.89.

The Nasdaq composite climbed 52.37 points, or 0.7 percent, to 7,643.41. The Russell 2000 index of smaller companies picked up 6.05 points, or 0.4 percent, to 1,555.88.

Major stock indexes in Europe also finished higher.

The three-day rally has helped the market reclaim the momentum it had in January and February, when it posted the best two-month start to a year since 1991. The S&P 500, Nasdaq, Dow and Russell 2000 are showing double-digit gains for the year so far.

Still, investors are still waiting for more details on any potential trade deal between the United States and China. Costly tariffs have hurt both nations and investors hope a deal can be struck to at least take some pressure off the global economy, which has shown signs of cooling off.

Traders drew encouragement from several economic reports Wednesday.

U.S. wholesale prices barely increased last month after falling for three straight months, a sign there is little inflation pressure in the economy. A report on orders to U.S. factories showed that business investment rose 0.8 percent after two months of declines, marking the biggest gain since a 1.5 percent July bump.

A burst of late-afternoon buying reversed a slide in Boeing shares. The stock briefly headed lower after the U.S. moved to temporarily ground all the aircraft manufacturer’s 737 Max 8 and Max 9 airplanes in the wake of Sunday’s deadly crash of an Ethiopian Airlines 737 Max 8, which killed 157 people. A similar Lion Air plane crashed in Indonesia in October, killing 189 people.

Boeing shares finished with a 0.5 percent gain. The stock slumped more than 11 percent the first two days of this week. Despite the recent slide, the stock is still up 16.9 percent for the year.

Health care sector stocks notched the biggest gain Tuesday.

Rite Aid jumped 6.1 percent after the drugstore chain announced a purge of its top management and plans to cut 400 full-time jobs. CEO John Stanley will step down when the company finds a replacement. Chief Financial Officer Darren Kast and Chief Operating Officer Kermit Crawford are also among the executives leaving the company.

Chipmaker Nvidia added 3.8 percent, leading technology sector stocks higher. Synchrony Financial gained 2.2 percent amid a broad financial sector rally.

Investors bid up shares in Canadian marijuana company Aurora Cannabis after it tapped hedge fund manager Nelson Peltz as an adviser. Peltz is the CEO and a founding partner of Trian Fund Management. Aurora said he will help the company explore potential partnerships and advise its global expansion plans. The stock jumped 13 percent.

Oaktree Capital Group surged 12.3 percent on news that Brookfield Asset Management is buying 62 percent of the company. The deal creates a combined company with $475 billion assets and $2.5 billion in annual fee-related revenue, the companies said. The deal includes options that could have Brookfield owning all of Oaktree by 2029.

Vera Bradley surged 21.8 percent after beating Wall Street forecasts for the fourth quarter and giving analysts a surprisingly good outlook for the year.

The maker of luggage and handbags reported lower sales during the quarter, but the results still topped forecasts. Both revenue and profit forecasts for the current fiscal push beyond Wall Street expectations.

Express skidded 10.1 percent after the clothing chain reported weak fourth-quarter sales and gave investors a disappointing first-quarter outlook.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.62 percent from 2.60 percent late Tuesday.

The dollar fell to 111.05 Japanese yen from 111.29 yen on Tuesday. The euro rose to $1.1329 from $1.1297.

The price of U.S. crude oil climbed 2.4 percent to settle at $58.26 a barrel, while Brent crude gained 1.3 percent to close at $67.55 a barrel. Wholesale gasoline added 2.3 percent to $1.86 a gallon, heating oil rose 0.3 percent to $1.99 a gallon and natural gas picked up 1.3 percent to $2.82 per 1,000 cubic feet.

The price of gold rose 0.9 percent to $1,309.30 an ounce, silver added 0.3 percent to $15.46 an ounce and copper gained 0.2 percent to $2.94 a pound.

Categories: Business | Wire stories
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