Tech, health care drive more market gains

A broad rally drove U.S. stocks solidly higher Thursday for the second day in a row, extending the market's gains for the week.

Technology companies, which have led the market this year, contributed the most to the rally. Health care stocks and banks also accounted for a big slice of the market's gains as investors sized up the latest company earnings and economic news. Oil prices rebounded after an early slide.

Wall Street’s gains Thursday turned the Dow Jones industrial average back to positive for the year.

Smaller-company stocks continued to post solid gains. The Russell 2000 index of smallercompany stocks picked up 7.66 points to 1,603.71. That's the highest close since January.

“They've had a good couple of months,” said Tom Martin, senior portfolio manager with Globalt Investments. “The dollar really strengthened here up until the last couple of days, and that is benefiting those smaller-cap companies.”

The major indexes were moving higher from the get-go Thursday as investors sifted through the latest measure of inflation in the economy.

The modest pace of consumer inflation may send a reassuring signal to the Federal Reserve, which is considering how quickly to raise interest rates this year.

The consumer price index rose 2.5 percent in April from 12 months earlier, the Labor Department said Thursday. It was the sharpest year-over-year increase in 14 months. But excluding the volatile food and energy categories, the so-called core prices ticked up just 0.1 percent in April and 2.1 percent from a year earlier.

Declines in the cost of new and used cars, as well as for wireless phone services and cable television, offset higher prices for gasoline, rents and medical services.

The Fed has signaled it will lift rates twice more this year, after an increase in March.

Some expect that an uptick in inflation or economic growth might spur the Fed to add a third hike.

“It tells us that rates are going to continue to go higher, but maybe it starts to call into question: Are we really going to have four? Maybe three is enough,” said Bob Doll, chief equity strategist at Nuveen Asset Management.

Bond investors appeared to interpret the consumer prices data as a sign that the Fed is not likely to speed up the pace of its planned rate hikes. Bond prices rose, pulling the yield on the 10year Treasury note down to 2.96 percent from 3 percent late Wednesday.

Tech stocks extended their gains. The sector is up 11.1 percent in 2018, ahead of all others.

On Thursday, Qualcomm led the sector, climbing 3.4 percent to $54.97 after the company's board approved a $10 billion share buyback.