U.S. stocks move higher as tech companies regain some ground
NEW YORK—U.S. stocks are higher Tuesday as energy companies rise with oil prices and technology and industrial companies bounce back from sharp losses the day before. Oil prices rallied as the U.S. pressed its allies to stop importing oil from Iran. General Electric is jumping after it said it will shed its health care business and its majority stake in oil services company Baker Hughes over the next few years.
KEEPING SCORE: The S&P 500 index gained 13 points, or 0.5 percent, to 2,730 as of 2:50 p.m. Eastern time. It fell 1.4 percent Monday, its worst loss since early April. The Dow Jones Industrial Average gained 117 points, or 0.5 percent, to 24,370. The Nasdaq composite added 48 points, or 0.7 percent, to 7,580 after it plunged 2.1 percent a day ago. The Russell 2000 index picked up 12 points, or 0.8 percent, to 1,670.
It’s been five months since the S&P 500 and Dow last closed at record highs. The S&P 500 is down about 5 percent since Jan. 26 and the Dow has fallen more than 8 percent. However the Nasdaq, which has a high concentration of technology companies, and the smaller and more domestically-focused Russell 2000, closed at record highs on Wednesday.
ENERGY: Oil prices jumped as the Trump administration said it’s pressuring allies to stop importing oil from Iran. If that happens, it would increase demand from other countries, which would likely produce more oil to pick up the slack. Benchmark U.S. crude added 3.6 percent to $70.53 a barrel in New York. Brent crude, used to price international oils, rose 2.1 percent to $76.31 per barrel in London.
President Donald Trump withdrew the U.S. from the Iran nuclear deal in May, so sanctions on Iran’s energy sector will kick in again in November. A senior State Department official says U.S. officials are telling Asian and European governments that they should completely eliminate their oil imports from Iran before the grace period expires on November 4, as the official says the U.S. doesn’t intend to issue waivers.
Exxon Mobil jumped 1.5 percent to $80.97 and Chevron picked up 1.5 percent to $124.45.
ELECTRIFIED: GE jumped 8.8 percent to $13.87 after the company said it will sell its two-thirds stake in Baker Hughes and also divest its health care business. The company has sold numerous major businesses in recent years including its railroad locomotive division, lending unit, its appliance businesses and its stake in NBC, and on Monday GE agreed to sell its gas-engine business to Advent International for $3.25 billion.
Baker Hughes rose 2.1 percent to $33.11, helped by the move in oil prices.
Tuesday was also the first day in 110 years that General Electric wasn’t part of the Dow Jones Industrial Average.
TECH: Apple climbed 2 percent to $185.79 and Microsoft gained 1.1 percent to $99.47 while Cisco Systems added 1.3 percent to $42.83. Technology stocks were hammered Monday as investors reacted to reports that the Trump administration might bar technology companies from selling certain high-tech products to China and other countries and limit investment in tech companies by Chinese firms. Stocks recovered some of those losses after a top U.S. trade adviser rebutted those reports.
Consumer focused companies also rose. Amazon jumped 1.9 percent to $1,694.81 and Netflix rose 4.4 percent to $401.39 after they dropped Monday. Homebuilder Lennar climbed 4. 5 percent to $51.44 after a strong quarterly report, and its competitors also climbed.
BONDS: Bond prices were little changed. The yield on the 10-year Treasury note remained at 2.88 percent. Banks continued to fall, as lower interest rates reduce the profits they make on mortgages and other types of lending.
OTHER COMMODITIES TRADING: Wholesale gasoline rose 1.1 percent to $2.07 a gallon. Heating oil gained 1.4 percent to $2.13 a gallon. Natural gas rose 0.5 percent to $2.94 per 1,000 cubic feet.