Stocks waver but close mostly up
Stocks wobbled Tuesday as large high-dividend stocks rose and smaller companies sank. Major indexes ended mostly higher. They were coming off big gains the day before.
Big healthcare companies including Johnson & Johnson rallied, as did telecommunications firms and household goods makers. Makers of steel and other materials skidded, and a steep loss for United Technologies pulled defense contractors lower.
Technology companies rose even though President Trump said he expects more tariffs on goods imported from China, some of which would hit computers and smartphones. Trump is scheduled to meet with China’s president this week.
“It is not unexpected that the administration would ramp up their threats moving into that meeting,” said Tracie McMillion, head of global asset allocation for Wells Fargo Investment Institute. She said stocks are likely to rise if the two sides are able to strike even a very general agreement.
The Standard & Poor’s 500 index rose 8.72 points, or 0.3%, to 2,682.17. The Dow Jones industrial average rose 108.49 points, or 0.4%, to 24,748.73. The Nasdaq composite inched up 0.85 of a point to 7,082.70.
With two months of volatility on investors’ minds and more likely to come, Wall Street gravitated toward traditionally safer, high-dividend stocks such as communications firms, utilities and consumer goods companies.
Smaller firms, especially in heavy industry and retail, took losses. The Russell 2000 index slid 13.10 points, or 0.9%, to 1,492.86; it set a record high in August but is now down 2.8% for the year.
“Later in the [economic] cycle, the cost of borrowing impacts small businesses,” McMillion said. ”
United Technologies slid 4.1% to $122.68 after saying it will split into three companies now that it has finished its purchase of aviation electronics maker Rockwell Collins. Investors weren’t impressed with the company’s forecasts for Rockwell Collins. United Technologies also said it doesn’t expect to buy back any more of its stock during the breakup.
Spirit Airlines surged 15.3% to $58.76 after it forecast a big jump in revenue in the fourth quarter. Investors were hopeful that other airlines might see similar gains. Delta climbed 2.8% to $58.31. United Continental ticked up 1.8% to $93.38.
Trump told the Wall Street Journal late Monday that he expects to raise tariffs on $200 billion worth of Chinese goods Jan. 1, and he threatened again to place tariffs on all remaining goods from China.
Apple slipped 0.2% to $174.24. Its stock has fallen 25% since early October, wiping out about $270 billion in value and leaving Apple and Microsoft essentially tied as the most valuable publicly traded companies in the world. Microsoft rose 0.6% to $107.14.
Maxim Integrated Products climbed 4.2% to $55.60 on the news that the San Jose chipmaker will be added to the S&P 500 index Monday. It will take the place of Aetna, which CVS is buying.
Benchmark U.S. crude edged down 0.1% to $51.56 a barrel. Brent crude fell 0.4% to $60.21 a barrel. Wholesale gasoline fell 1.5% to $1.42 a gallon. Heating oil fell 0.4% to $1.89 a gallon. Natural gas rose 0.4% to $4.26 per 1,000 cubic feet.
Bond prices rose. The yield on the 10-year Treasury note fell to 3.06% from 3.07%.