US index remains in record mood
US investors remained in a record-setting mood, edging the Dow Jones industrial average and Standard & Poor’s 500 index to their latest all-time highs.
Pharmaceutical and medical equipment companies led the broad pick-up in stocks, extending gains for the S&P 500 and Dow. The Nasdaq notched its first gain this week.
A positive outlook from homebuilders and encouraging news from Japan and Germany also helped lift markets.
The rally builds on a market rebound in recent weeks powered by strong corporate earnings and easing concerns among investors about the spread of Ebola and economic growth overseas.
The major stock indexes opened flat on Monday, but quickly began to rise.
Germany’s ZEW measure of investor sentiment showed an improvement in November after 10 months of declines, allaying worries about a slowing economy and lifting European markets.
Developments in Japan, whose economy slipped into recession in the third quarter, provided some relief.
Tokyo’s benchmark Nikkei index rose 2.2% amid expectations, later confirmed, that Japan’s government will delay a sales tax hike that was planned for next year.
US stocks also got a boost from an increase in a measure of home builders’ confidence, which rebounded in November as both sales expectations and buyer traffic improved.
The indexes continued to build on their gains throughout the day as investors piled into health care stocks. Pharmaceutical giant Actavis led all stocks in the S&P 500, vaulting 8.7%. Medical device maker Medtronic climbed 3.3%.
The energy sector lagged the rest of the market as the price of oil resumed its slide.
All told, the S&P 500 index added 10.48 points, or 0.5%, to 2,051.80. Its previous closing high was set on Monday.
The Dow rose 40.07 points, or 0.2%, to 17,687.82. That’s just 0.2% higher than its most recent record close last Thursday.
The Nasdaq composite gained 31.44 points, or 0.7%, to 4,702.44.
Nine of the 10 sectors in the S&P 500 notched gains, led by health care stocks. The sector is up 23.5% this year. Telecommunications stocks declined.
On October 15 the S&P 500 nearly fell into a “correction”, a trading term for a drop of 10% or more from a recent peak. The market has mostly risen since then.
The rise in Actavis came a day after the company agreed to buy Botox-maker Allergan for 66 billion dollars. Actavis rose 21.66 to 269.60.
Medtronic shares ended up 3.28 dollars at 72.47.
Investors kept rewarding strong company earnings.
Solar power products company JA Solar jumped 8.8% after it reported better-than-expected quarterly financial results. The stock added 69 cents to 8.49.
Some companies’ quarterly report cards failed to impress investors.
Urban Outfitters fell 6.6% a day after the retailer reported third-quarter results that fell short of Wall Street’s expectations. The stock shed 2.04 dollars to 28.79.
Home Depot’s third-quarter profit rose 14%, but the company said it could not account for all possible losses from a huge data breach it revealed in September. Shares in the nation’s largest home improvement retailer fell 2.05, or 2.1%, to 95.98.
With the bulk of earnings season over, investors are looking ahead to how companies will fare this holiday season.
Market watchers anticipate the slide in gas prices will prompt consumers to spend more in coming weeks. The average price of petrol in the US fell to 2.89 dollars this week, 33 cents below prior-year levels.
The price of oil fell on mounting evidence of a slower global economy and doubts that OPEC will decide to cut output when it meets next week.
Benchmark U.S. crude fell 1.03 to close at 74.61 dollars a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many US refineries, fell 84 cents to close at 78.47 dollars on the ICE Futures exchange in London.
In other energy futures trading on the NYMEX:
- Wholesale petrol rose 1.7 cents to close at 2.043 a gallon
- Heating oil fell 2.3 cents to close at 2.381 a gallon.
- Natural gas fell 9.7 cents to close at 4.244 per 1,000 cubic feet.
Gold rose 13.60 to 1,197.10 dollars an ounce, silver rose 12 cents to 16.17 an ounce and copper fell four cents to three dollars a pound.
The yield on the 10-year US Treasury note slipped to 2.32% from 2.34% late Monday.
Among stocks making big moves Tuesday:
- Nokia rose 26 cents, or 3.4%, to 7.93 dollars on news that the company plans to launch a tablet computer next year that will run on the Android operating system.
- SunEdison surged 29.3% after the solar energy company agreed to buy wind energy company First Wind for more than 1.9 billion dollars. SunEdison gained 4.87 to 21.48.
