Stocks climb as stronger economic growth cheers investors
NEW YORK » U.S. stocks are rising, with some of the largest gains going to technology and health care companies, banks, retailers and travel companies. The Commerce Department raised its estimate for economic growth and said the U.S. gross domestic product grew at its fastest pace in two years between April and June. KEEPING SCORE » The Standard & Poor’s 500 index climbed 13 points, or 0.5 percent, to 2,459 as of 2:50 p.m. Eastern time. The Dow Jones industrial average picked up 36 points, or 0.2 percent, to 21,901. The Nasdaq composite gained 67 points, or 1.1 percent, to 6,369 as technology companies rose for the third day in a row. The Russell 2000 index of smaller-company stocks added 7 points, or 0.5 percent, to 1,390. ECONOMY AND HIRING » The U.S. economy grew 3 percent in the second quarter, the fastest pace in two years. The Commerce Department raised its projection from last month, and it’s much better than the first quarter, when the U.S. gross domestic product grew 1.2 percent. Meanwhile, private businesses added 237,000 jobs in August with broad gains across several industries including construction, manufacturing and leisure and hospitality, according to a survey by ADP. THE QUOTE » “For all the tough times we’ve had the last couple of weeks, the thing that’s kept the market afloat is the strong economic data,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management. He said investors will be looking for evidence of higher pay and rising inflation in economic reports over the next few days, and said stocks should keep rising as long as the economy remains in good shape and inflation doesn’t pick up. LEADERS » Chipmaker Analog Devices advanced after it announced strong results in the third quarter along with a better-than-expected revenue forecast for the current period. Its stock jumped $3.86, or 4.9 percent, to $83.41. Microsoft gained $1.05, or 1.4 percent, to $74.10 and Facebook picked up $1.65, or 1 percent, to $169.70. Amazon rose $12.46, or 1.3 percent, to $966.52, and Bank of America climbed 45 cents, or 1.9 percent, to $23.91. EARNINGS » Drone maker AeroVironment climbed $7.07, or 18 percent, to $46.42 after the company said product sales almost doubled in the fiscal first quarter. Brown-Forman, the maker of Jack Daniel’s whiskey and other drinks, raised its profit forecast and posted strong first-quarter results. The shares rose $1.67, or 3.3 percent, to $52.87.
H&R Block lost $2.25, or 7.7 percent, to $26.98 after it said it isn’t planning any major cost cuts in its new fiscal year, unlike the year before. BONDS » Investors’ concerns about tensions between the U.S.
and North Korea appeared to ease, and bond prices inched lower after a big jump the day before. The yield on the 10-year Treasury note rose to 2.14 percent from 2.13 percent. STORM DAMAGE » Energy companies continued to fall as the Gulf region was inundated with rain by Harvey, which has knocked out significant oil drilling and refining capacity. On Tuesday the largest oil refinery in the U.S. was shut down and the operator of a major pipeline carrying fuel to the East Coast said it was running at a reduced rate.
The tropical storm has dumped a record amount of rain on the Gulf Coast. It made landfall again in Louisiana overnight. Authorities say at least 20 people have died in the storm and 13,000 have been rescued.
Benchmark U.S. crude lost 48 cents, or 1 percent, to $45.96 a barrel in New York while Brent crude, the international standard, fell $1.14, or 2.2 percent, to $50.86 a barrel in London. The price of wholesale gasoline rose another 10 cents, or 5.7 percent, to $1.88 a gallon.