Solid earn­ings help main stock in­dexes set records

Los Angeles Times - - BUSINESS BEAT - As­so­ci­ated press

Stocks on Wall Street closed broadly higher Wed­nes­day, driv­ing the three main U.S. in­dexes to more record highs.

Tech­nol­ogy stocks pow­ered much of the rally as in­vestors fo­cused on a batch of mostly solid com­pany earn­ings re­ports, and wor­ries about the eco­nomic ef­fect of the coro­n­avirus out­break that orig­i­nated in China con­tin­ued to sub­side.

Health of­fi­cials raised hopes that the spread of the virus is peak­ing af­ter the num­ber of new cases dropped for a sec­ond straight day. Wor­ries about the eco­nomic ef­fect of the out­break fu­eled a wave of sell­ing that erased the mar­ket’s gains in Jan­uary, but traders have since largely set aside their jit­ters.

The Stan­dard & Poor’s 500 in­dex is up 4.8% so far this month, on pace for its big­gest monthly gain since June. On Wed­nes­day it rose 21.70 points, or 0.6%, to 3,379.45. The Nas­daq climbed 87.02 points, or 0.9%, to 9,725.96. Both in­dexes have set all-time clos­ing highs ev­ery day this week.

The Dow Jones in­dus­trial av­er­age rose 275.08 points, or 0.9%, to a new record of 29,551.42. The Rus­sell 2000 in­dex of smaller-com­pany stocks ticked up 11.86 points, or 0.7%, to 1,689.38.

Bond prices fell. The yield on the 10-year Trea­sury rose to 1.63% from 1.59%.

Stronger-than-ex­pected com­pany earn­ings re­ports and pos­i­tive U.S. eco­nomic data have helped keep in­vestors in a buy­ing mood. Traders are also bet­ting that cen­tral banks and gov­ern­ments around the world will sup­port mar­kets with in­ter­est-rate cuts and stim­u­lus to stem any po­ten­tial eco­nomic fall­out from the virus out­break.

In­vestors got some en­cour­ag­ing news Wed­nes­day when health of­fi­cials re­ported that the num­ber of new cases of the coro­n­avirus in China de­clined for a sec­ond straight day.

Mean­while, Chi­nese Pres­i­dent Xi Jin­ping promised tax cuts and other aid to in­dus­try as the rul­ing Com­mu­nist Party tries to limit the mount­ing dam­age to the econ­omy.

Stocks of com­pa­nies fo­cus­ing on travel made some of the strong­est gains Wed­nes­day. United Air­lines rose 2.1%, and Wynn Re­sorts and Royal Caribbean Cruises each climbed 3.7%.

Tech­nol­ogy stocks led the broader mar­ket’s gains. Mi­cron Tech­nol­ogy climbed 3.5%. Ap­ple rose 2.4%.

Com­pa­nies that rely on con­sumer spend­ing also did well. Nike gained 3%. Gap jumped 4.7%.

Com­mu­ni­ca­tion ser­vices stocks notched solid gains. Twit­ter ad­vanced 3.2%. Video-game de­vel­oper Ac­tivi­sion Bliz­zard rose 2.6%.

The price of crude oil jumped 2.5%, which gave en­ergy com­pa­nies a boost. Hess led the gain­ers, climb­ing 4.7%. The en­ergy sec­tor re­mains the mar­ket’s worst per­former this year: It’s down 9.1%.

The pickup in bond yields weighed on sev­eral home builders, in­clud­ing Toll Broth­ers, which slid 1.6%. Mort­gage rates tend to track the 10-year Trea­sury yield, so a rise in the yield means less at­trac­tive rates.

Util­i­ties and mak­ers of house­hold goods lagged be­hind the broader mar­ket, an­other sign that in­vestors were more con­fi­dent and shift­ing money into in­vest­ments that carry more risk.

In­vestors con­tin­ued to as­sess com­pany earn­ings re­ports.

Lyft plunged 10.2% af­ter the ride-hail­ing com­pany stuck to a pre­dic­tion that it won’t turn a profit un­til the fourth quar­ter of 2021. By con­trast, ri­val Uber said this month that it would make money in the fourth quar­ter of this year.

Bench­mark crude oil rose $1.23 to $51.17 a bar­rel. Brent crude oil, the in­ter­na­tional stan­dard, rose $1.78 to $55.79 a bar­rel. Whole­sale gaso­line rose 7 cents to $1.58 a gal­lon. Heat­ing oil climbed 5 cents to $1.68 a gal­lon. Nat­u­ral gas rose 5 cents to $1.84 per 1,000 cu­bic feet.

Gold rose $1.80 to $1,567.40 an ounce. Sil­ver fell 9 cents to $17.48 an ounce.

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