Stocks deliver solid gains as crude surges
Technology companies and banks helped power U.S. stocks to solid gains Wednesday, improving on the market's flat finish a day earlier.
Energy stocks led the gainers after the price of crude oil climbed back above $70 a barrel a day after the U.S. moved to withdraw from a nuclear accord with Iran. Gains in industrial and materials companies outweighed losses in safe-play sectors such as utilities and phone companies.
“The areas of strength that you're seeing today are encouraging,” said Willie Delwiche, investment strategist at Baird. “Energy, financials, materials and industrials. Those are more cyclical areas of the market, and that speaks to economic strength and a risk appetite on the part of investors.”
The S&P 500 index rose1 percent to 2,697.79. The gain nudged the benchmark index into positive territory for the year. The Dow Jones industrial average posted its fifth gain in a row.
Electronic Arts led a technology sector rally, climbing 5.7 percent to $131.01 after the video game maker's latest quarterly results beat forecasts.
TripAdvisor soared 22.8 percent to $47.62 after the online travel booking company reported earnings that were much higher than analysts expected. It also raised its annual forecast.
While technology companies helped drive the market higher, energy sector stocks racked up the biggest gain as crude oil prices rebounded a day after the Trump administration moved to withdraw the U.S. from a 2015 nuclear accord with Iran and reinstate sanctions on the country.
“We've had some noise from Iran, but some of the underlying trends are probably still intact in terms of a recovering economy, high demand and higher inflation,” Delwiche said of the oil market.
The pickup in oil prices sent energy stocks higher. Occidental Petroleum rose 5.4 percent to $82.40.
Some companies' quarterly results put investors in a selling mood.
Monster Beverage slumped 7.5 percent to $49.11 after the energy drink maker reported disappointing sales in the first quarter and said its profit margins decreased.
Papa John's International dropped 3.7 percent to $56.55 after the pizza chain's first-quarter results fell short of analyst estimates.
Walt Disney's better-than-expected results also failed to impress traders, who took a dim view of the entertainment company's struggling ESPN network. Disney shares fell 1.8 percent to $99.97.
Walmart slid 3.1 percent to $83.06 after the retailer agreed to buy a 77 percent stake in India's Flipkart in a $16 billion deal.
The move is Walmart's biggest acquisition yet and reflects the retailer's focus on growth opportunities as it tries to narrow the gap with Amazon.com.