Stocks claw back more lost ground
new york» U.S. stocks rose for the fourth day in a row Tuesday as they continued to recover the ground they lost last week. Major indexes approached record highs again.
Most of the gains went to banks, which surged as bond yields jumped. That will allow them to charge higher rates on loans. Banks took steep losses last Wednesday, when stocks had their worst day since September. Scientific instrument companies and drugmakers also rose. However auto parts companies were hammered after poor third-quarter results from AutoZone and home builders fell after sales of new homes sank in April.
The four-day rally has restored most of the market’s losses and the Standard & Poor’s 500 index is almost back to record highs.
“The market was simply reminded that there’s political risk out there and it reacted to that reminder,” said Matthew Peterson, chief wealth strategist for LPL Financial. Peterson said he doesn’t think long-term investors have made big changes to their portfolios in response to last week’s drop, which followed allegations President Donald Trump asked the FBI to end an investigation into former National Security Adviser Michael Flynn.
Peterson says high stock prices and the calm market makes stocks more vulnerable to surprises from the political arena.
The S&P 500 added 4.40 points, or 0.2 percent, to 2,398.42. The Dow Jones industrial average edged up 43.08 points, or 0.2 percent, to 20,937.91. The Nasdaq composite rose 5.09 points, or 0.1 percent, to 6,138.71. The Russell 2000 index of smallcompany stocks gained 3.84 points, or 0.3 percent, to 1,380.98.
Auto parts retailer AutoZone took its worst one-day loss in eight and a half years as high costs and lower sales at older locations hurt its results. Its stock fell $78.09, or 11.8 percent, to $581.40.
Sales of new homes fell 11 percent in April from the month before, the biggest drop in more than two years. Sales had reached a nine-year high in March, and experts said the decline was most likely a blip. Homebuilder NVR fell $61.27, or 2.6 percent, to $2,296 and D.R. Horton lost 54 cents, or 1.6 percent, to $33.37.
Benchmark U.S. crude oil added 34 cents to $51.47 a barrel in New York. Brent crude, used to price international oils, picked up 28 cents to $54.15 a barrel in London.