Tech firms lead stocks higher; oil slumps

Stocks closed higher on Wall Street for the second straight day Wednesday, extending Tuesday’s strong gains as investors bet an interest rate cut could be ahead.

Technology, industrial and health care companies accounted for much of the broad gains, which were tempered by a slide in energy stocks following a 3.4 percent plunge in the price of U.S. crude oil.

Traders shrugged off a report showing private U.S. companies added the fewest jobs in nine years last month. The bleak jobs snapshot may have been welcomed by investors hoping that it could help persuade the Federal Reserve to cut interest rates.

“It could help underpin a Fed rate cut,” said Quincy Krosby, chief market strategist at Prudential Financial. “The market has been in essence calling for a rate cut for a number of months as the economic data have waned and tariff issues have intensified.”

The S&P 500 index gained 22.8 points, or 0.8 percent, to 2,826.15. The benchmark index’s 2.1 percent gain Tuesday was its best performance since January.

The Dow Jones Industrial Average climbed 207.39 points, or 0.8 percent, to 25,539.57. The Nasdaq composite rose 48.36 points, or 0.6 percent, to 7,575.48. The Russell 2000 index of smaller companies slipped 1.77 points, or 0.1 percent, to 1,506.79.

Major stock indexes in Europe closed broadly higher.

Bond prices rose, pulling down yields on the 10-year

Treasury note to 2.12 percent from 2.13 percent late Tuesday.

Federal Reserve Chairman Jerome Powell said Tuesday that the central bank was “closely monitoring” developments in the United States’ multiple trade conflicts and would “act as appropriate” to sustain the nation’s economic expansion.

Investors now expect the central bank to cut rates at least once and possibly twice before year’s end, in part because of fallout from the trade war.

Stocks slumped in May as investors grew anxious over the trade disputes. An escalating trade war between the U.S. and China and the added threat of a new trade war with Mexico sent investors fleeing to safer holdings, like bonds.

The U.S. and Mexico were holding trade talks in Washington late Wednesday afternoon. A 5 percent tariff on imports from Mexico, which could affect U.S. companies making everything from cars to beer and tacos, is due to go into effect on Monday, barring an agreement between the two countries. The Trump administration is demanding that Mexico step up efforts to halt Central American migrants from making their way to the U.S.

Oil prices slumped following a report showing an unexpected surge in U.S. crude supplies.

Benchmark U.S. crude settled at $51.68 a barrel. Brent crude oil, the international standard, closed 2.2 percent lower at $60.63 a barrel.

U.S. crude has fallen in five of the past six weeks amid signs that China’s economic growth is slowing. It’s now 22.1 percent below its 2019 closing high of $66.30 in April. The slide puts U.S. crude in what Wall Street calls a bear market.

“Oil is lagging and it has to do with the perception that demand is down,” Krosby said. “Couple that with supply growing and the equation is not positive for the

price of oil.”

Occidental Petroleum dropped 4.6 percent and Halliburton slid 3.5 percent.

Technology companies were among the most notable gainers Wednesday. Apple rose 1.6 percent and Microsoft added 2.2 percent. Salesforce climbed 5.1 percent after blowing away profit forecasts.

Traders also snapped up health care stocks. Boston Scientific gained 2.5 percent and Medtronic rose 2.3 percent.

Industrial stocks rose broadly, with notable gains by airlines as fuel costs fell. American Airlines Group gained 4.3 percent and Southwest Airlines rose 2.6 percent.

A trickle of corporate earnings reports moved several stocks.

Campbell Soup jumped 10 percent after the iconic 146-year-old company swung to a fiscal third quarter profit and beat Wall Street forecasts. The maker of Pepperidge Farm cookies and V8 juice also beat revenue forecasts for the quarter and said sales growth was fueled by its snacks business.

GameStop plummeted 35.5 percent after the video game maker badly missed sales estimates in the first quarter and eliminated its quarterly dividend. The company is in the midst of a cost-cutting program and coming off of a management shake up. The stock is now down 60.1 percent for the year.

Pivotal Software nosedived 41.3 percent after the cloud-computing company slashed its revenue forecast for the year.

In other energy futures trading, wholesale gasoline fell 1.8 percent to $1.69 per gallon. Heating oil dropped 2.3 percent to $1.78 per gallon. Natural gas slid 1.6 percent to $2.38 per 1,000 cubic feet.

Gold inched 0.4 percent higher to $1,333.60 per ounce, silver added 0.1 percent to $14.79 per ounce and copper fell 1.7 percent to $2.62 per pound.

The dollar rose to 108.42 Japanese yen from 108.07 yen on Tuesday. The euro weakened to $1.1228 from $1.1258.