Energy, banking stocks show solid daily gains
Rising bond yields give boost to financial firms; investors back companies with strong reports.
Banks and other financial companies led U.S. stocks modestly higher Thursday, nudging the Nasdaq composite index to an all- time high.
Rising bond yields, which can result in higher interest rates on loans and bigger profits for banks, helped put traders in the mood to buy banking stocks. Energy companies also notched gains as crude oil prices rose. Utilities and other highdividend stocks fell.
Investors also bid up shares in companies that released strong quarterly results or announced big transactions.
“Equities are ending the first quarter in a reasonably good place,” saidTerry Sandven, chief equity strategist at U. S. Bank Wealth Management. “I do think equities trend sideways, probably for the next month. The rally since the election has centered around improved sentiment regarding tax reform and infrastructure spending, and that’s still a work in progress.”
Bond prices edged lower. The 10- year Treasury yield rose to 2.41 percent from 2.38 percent late Wednesday.
“Today’s action and the little bit of strength we’ve seen the past couple of days is maybe investors focusing a little bit more on fundamentals and the fact that the economy and earnings are in the same trajectory as they were two weeks ago when the markets were at all- time highs, and we’re slightly below that,” said Sean Lynch, co- head of global equity strategy at Wells Fargo Investment Institute.
Financial sector stocks rose 1.2 percent, the biggest gain among the 11 sectors in the S& P 500. The sector, which is up 2.8 percent this year, accounted for more than half the index’s gains Thursday.
Traders bid up shares in big banks such as Capital One Financial, which rose $ 2.46, or 2.9 percent, to $ 87.14.
Conoco Phillips jumped after the energy company agreed to sell most of its Canadian assets to Canada’s Cenovus Energy in a deal valued at $ 13.2 billion. The stock was the biggest gainer in the S& P 500 index, climbing $ 4.05 to $ 50.
Extreme Networks surged 14.2 percent after the network infrastructure equipment maker agreed to buy a data center, switching, routing and analytics business from Brocade Communications once Brocade is acquired by Broadcom. Shares in Extreme Networks rose 92 cents to $ 7.38.
Other companies failed to impress traders. Lululemon sank 23.4 percent a day after the yoga clothing company’s forecast for the quarter fell well short of Wall Street’s expectations. The stock slid $ 15.54 to $ 50.76.
Science Applications International tumbled 13.1 percent after the information technology company’s latest quarterly results missed estimates. The company cited a variety of problems, including delays and declines in contract work. The stock lost $ 11.28 to $ 74.97.
In energy futures trading, benchmark U. S. crude oil rose 84 cents, or 1.7 percent, to close at $ 50.35 a barrel in New York. Brent crude, used to price international oils, gained 54 cents, or 1 percent, to $ 52.96 a barrel in London. Natural gas slipped 4 cents to $ 3.19 per 1,000 cubic feet, wholesale gasoline rose a penny to $ 1.68 per gallon and heating oil gained 2 cents to $ 1.56 per gallon.
The price of gold fell $ 8.70 to settle at $ 1,245 an ounce. Silver slid 5 cents to $ 18.21 per ounce. Copper slipped a penny to $ 2.67 per pound.
In currency trading, the dollar rose to 111.60 yen from 111.03 yen on Wednesday. The euro fell to $ 1.0691 from $ 1.0760.