Tech, re­tail help drive re­bound

The Mercury (Pottstown, PA) - - BUSINESS - By Alex Veiga

U.S. stocks notched solid gains Wed­nes­day, re­coup­ing some of the mar­ket’s losses from a day ear­lier.

Tech­nol­ogy and health care com­pa­nies drove much of the re­bound, out­weigh­ing losses in safe-play stocks like util­i­ties and real es­tate in­vest­ment trusts. Small-com­pany stocks fared bet­ter than the rest of the mar­ket.

Macy’s led a rally among re­tail­ers af­ter re­port­ing sur­pris­ingly strong re­sults, adding to the strong wave of cor­po­rate earnings in re­cent weeks.

“Earnings growth has shown through and that’s been pri­mar­ily based on strong fun­da­men­tal growth from U.S. com­pa­nies,” said Jamie Lavin, global in­vest­ment spe­cial­ist at J.P. Mor­gan Pri­vate Bank. “And when eq­uity mar­kets are able to look through to that and we don’t have any ma­jor geopo­lit­i­cal head­lines, we tend to have stronger days in the mar­ket.”

The S&P 500 index rose 11.01 points, or 0.4 per­cent, to 2,722.46. The Dow Jones in­dus­trial av­er­age gained 62.52 points, or 0.3 per­cent, to 24,768.93. The in­crease nudged the 30-com­pany av­er­age to a small gain for the year.

The Nasdaq com­pos­ite added 46.67 points, or 0.6 per­cent, to 7,398.30. The Rus­sell 2000 index of smaller-com­pany stocks picked up 16.03 points, or 1 per­cent, to 1,616.37, top­ping its last all-time high in Jan­uary.

The stock in­dexes wa­vered lit­tle from their up­ward tra­jec­tory Wed­nes­day as in­vestors ap­peared

to shake off con­cerns about the prior day’s spike in bond yields. The mar­ket also failed to re­act much to a Com­merce De­part­ment re­port early Wed­nes­day that showed U.S. res­i­den­tial con­struc­tion fell 3.7 per­cent in April fol­low­ing a steep drop in apart­ment con­struc­tion.

“The mar­ket is tak­ing the weaker num­ber with a grain of salt, re­mem­ber­ing that colder weather could be a fac­tor,” Lavin said. “Year-over-year hous­ing per­mits are still up.”

Tech­nol­ogy and health care com­pa­nies bounced back Wed­nes­day af­ter tak­ing some of the worst losses a day ear­lier. Western Dig­i­tal rose 4.9 per­cent to $87.02, while Cerner added 2.9 per­cent to $59.97.

In­vestors con­tin­ued to sift through the lat­est batch of cor­po­rate re­port cards from big-name re­tail­ers, many of which are is­su­ing quar­terly re­sults this week.

Macy’s lat­est re­sults far ex­ceeded an­a­lysts’ ex­pec­ta­tions. The de­part­ment store op­er­a­tor noted that its Bloom­ing­dale’s and Blue­mer­cury di­vi­sions as well as its flag­ship store brand all did well. The com­pany’s shares led all stocks in the

S&P 500, vault­ing 10.8 per­cent to $33.17.

“See­ing en­cour­ag­ing earnings and guid­ance from Macy’s, on top of as­ex­pected growth in re­tail sales, it gives in­vestors ad­di­tional rea­son to be op­ti­mistic,” said Sam Sto­vall, chief in­vest­ment strate­gist at CFRA Eq­uity Re­search.

Of­fice De­pot climbed 5.1 per­cent to $2.46 af­ter the of­fice sup­ply com­pany main­tained its fore­casts for

the year.

Sev­eral other re­tail­ers also moved higher. Nord­strom added 2.4 per­cent to $51.05, while L Brands gained 2.6 per­cent to $34.19. Tar­get shares picked up 2.9 per­cent to $75.23.

In­vestors will get to pore over more re­sults from re­tail­ers Thurs­day, in­clud­ing Walmart, J.C. Pen­ney and Nord­strom.

“Re­tail is im­por­tant be­cause it’s a re­flec­tion of con­sumer sen­ti­ment and you have many peo­ple who are em­ployed by the brick-and­mor­tar re­tail­ers,” Sto­vall said.

Abaxis was among the big gain­ers Wed­nes­day. The vet­eri­nary di­ag­nos­tics prod­ucts com­pany vaulted 16.2 per­cent to $83.34 af­ter it agreed to be ac­quired by Zoetis.

The dol­lar fell to 110.25 yen from 110.38 yen on Tues­day. The euro weak­ened to $1.1802 from $1.1847.


Vin­cent Pepe en­joys some fresh air out­side the New York Stock Ex­change, where he works.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.