Tech, health care stocks send indexes soaring
U.S. stock indexes drifted back to record highs as investors got ready for another round of corporate reports.
NEW YORK » U.S. stock indexes drifted back to record highs Wednesday as investors got ready for another round of corporate reports to begin. Technology, health care and household goods companies all rose.
Technology companies like PayPal, Visa, and Google’s parent company Alphabet made some of the biggest gains as the market was little changed for the third day in a row. Banks slipped along with interest rates and industrial companies took small losses.
Minutes from the Federal Reserve’s September meeting showed officials were split about whether they need to raise interest rates again soon. But they appeared to be getting used to the idea that inflation is going to stay lower than they had hoped. For years it’s come up short of their 2-percent target.
Kristina Hooper, global markets strategist for Invesco, said one reason for that low inflation is continued fallout from the financial crisis a decade ago. In her view, many of the jobs that were lost after the 2008-09 meltdown were replaced by lower-paying ones.
“There are still a good portion of Americans who are making less today than they made before the global financial crisis,” she said. “That’s playing a role in lower wage growth and low inflation.”
The Standard & Poor’s 500 index gained 4.60 points, or 0.2 percent, to 2,555.24. The Dow Jones industrial average added 42.21 points, or 0.2 percent, to 22,872.89. The Nasdaq composite rose 16.30 points, or 0.2 percent, to 6,603.55. All three indexes finished at alltime highs. The Russell 2000 index of smaller-company stocks edged down 1.08 points, or 0.1 percent, to 1,506.92.
Hooper said inflation might increase if President Donald Trump and Congress pass a tax cut that encourages businesses to invest more money. She said that businesses and consumers both feel optimistic about the economy, but they’re reluctant to spend money because they’re not sure what economic policy will look like.
Airlines rose for the second day in a row. Delta Air Lines’ profit and revenue were better than analysts anticipated, and the company also issued a strong forecast for the fourth quarter. Delta rose 37 cents to $53.07. It has surged 9 percent since Oct. 3, when it raised its third-quarter projections. JetBlue gained 30 cents, or 1.5 percent, to $20.53 after it gave an update on the revenue it lost following hurricanes Irma and Maria.
Johnson & Johnson led health care companies higher after it asked regulators to approve its drug apalutamide. It’s intended for patients with a hard-to-treat form of prostate cancer. Johnson & Johnson stock climbed $2.75, or 2.1 percent, to $136.65.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.35 percent from 2.36 percent. That sent affected bank stocks because lower yields mean lower interest rates on loans, and lower profits for banks.
JPMorgan Chase and Citigroup will report their quarterly results Thursday morning as bank earnings get started.
An upset loss by the U.S. men’s soccer team dented shares of Twenty-First Century Fox. The team will miss the 2018 World Cup following its loss to Trinidad and Tobago. That could cut into advertising revenue for Fox, which will broadcast the event. The stock fell 66 cents, or 2.5 percent, to $26.11.
The American flag flies above the Wall Street entrance to the New York Stock Exchange.