Stocks rally behind tech, health care
trading. The Dow Jones Industrial Average gained 55.53 points, or 0.2 percent, to 25,119.89. The Nasdaq composite jumped 49.40 points, or 0.6 percent, to 7,855.12 and surpassed the record high it set last week. The Russell 2000 index of smaller-company stocks rose 8.72 points, or 0.5 percent, to 1,687.26.
Companies that sell clothing, food and household goods made solid gains. Ralph Lauren advanced 2.6 percent to $ 133.30 and PepsiCo climbed 1.7 percent to $114.88. Amazon as it said sales in the first hours of its annual Prime Day promotion improved compared to last year in spite of website problems. The company said it’s resolving those issues. The stock rose 1.2 percent to $1,843.93.
Netflix’s weak subscriber totals sent the stock down 5.2 percent to $379.48. The company has regularly beaten its own subscriber forecasts, but failed to do so in the second quarter and its third-quarter estimate was lower than analysts expected. Things looked far worse for Netflix in early trading as the stock plunged 14.1 percent before recovering most of that drop. Even with Tuesday’s loss, the stock is up 98 percent this year.
Johnson & Johnson’s second-quarter profit grew thanks to better results from its prescription drug business, and it posted higher sales than analysts expected. The stock gained 3.5 percent to $129.11.
Financial services company Charles Schwab climbed 3.6 percent to $52.88 after it surpassed Wall Street forecasts in the latest quarter.
UnitedHealth, the largest U.S. health insurance company, once again beat expectations in the latest quarter and raised its annual profit forecast. But the company’s spending on medical costs was higher than analysts expected, and the stock lost 2.6 percent to $250.29. Investors worried that other health insurers would have similar problems, and competitors Anthem and Humana also slipped.
Advertising companies sank after Omnicom said its business in North America decreased in the second quarter and its U.K. business also shrank. The advertising conglomerate lost 9.5 percent to $70.69 and Interpublic Group shed 6.1 percent to $22.26.
The European Union and Japan signed a broad trade deal Tuesday that will eliminate nearly all tariffs across a third of the global economy. Japanese consumers will pay lower prices for European wine and pork, while Japanese machinery parts, tea and fish will get cheaper for Europe. The deal has been in the works for years and contrasts with the more protectionist approach of U.S. President Donald Trump.