US stocks climb, led by tech and consumer companies
By Marley Jay
NEW YORK — U.S. stocks are starting higher Monday as investors get back to trading after the Easter holiday weekend. Technology companies are making some of the largest gains and industrial and consumer-focused companies are also rising after the Chinese government said that country’s economy grew at a slightly faster pace in the first quarter.
KEEPING SCORE: The Standard & Poor’s 500 index climbed 12 points, or 0.5 percent, to 2,341 as of 11:20 a.m. Eastern time. The Dow Jones industrial average rose 113 points, or 0.6 percent, to 20,566. The Nasdaq composite picked up 36 points, or 0.6 percent, to 5,840. The Russell 2000 index of smaller-company stocks edged up 8 points, or 0.6 percent, to 1,353. Stocks have declined three weeks out of the last four.
Leaders included chipmaker Nvidia, which gained $2.44, or 2.6 percent, to $97.93, and Google parent company Alphabet, which picked up $10.46, or 1.2 percent, to $850.64. Among consumer companies, online retail giant Amazon jumped $9.57, or 1.1 percent, to $894.24 and streaming video company Netflix added $3.38, or 2.4 percent, to $146.30. Netflix will report its quarterly results after the market closes.
CHINA: China’s recovering economy appeared to get stronger in the first quarter, as it grew 6.9 percent compared to a year ago. That was a slightly faster pace than the quarter before. The world’s second-largest economy grew at its slowest pace in almost 30 years in 2016. Policies aimed at tempering the slowdown included higher spending on construction of infrastructure such as roads and bridges. Relatively cheap credit spurred booming property sales. The official full-year economic growth target for 2017 is 6.5 percent.
LET’S NOT SPLIT UP: Medical device maker Alere surged after it accepted a new, lower buyout offer from Abbott Laboratories. Abbott will pay $51 a share, or about $5.3 billion. Abbott agreed to buy Alere more than a year ago for $56 per share, or $5.8 billion, but filed a lawsuit to end the deal after Alere recalled a key product, delayed filing a financial statement, and faced an investigation into its business outside the U.S.
Alere climbed $6.95, or 16.4 percent, to $49.26. It had traded as low as $31.47 last July, as investors worried the deal would fall apart after news of the investigation broke. Abbott rose 58 cents, or 1.4 percent, to $43.25.
ACHES AND PAINS: Eli Lilly and Incyte stumbled after the Food and Drug Administration refused to approve their much-anticipated pill for the immune disorder rheumatoid arthritis. Incyte said the FDA wants more clinical data about the most appropriate doses of Olumiant and address safety concerns. That may mean the companies will have to run more studies of the drug.
Olumiant was approved in Europe in February and Lilly has high hopes for it because it’s a pill instead of an injection like most other new rheumatoid arthritis drugs. It’s the second drug development setback for Lilly since November and its stock lost $3.34, or 3.9 percent, to $82.54. Incyte sank $15.09, or 10.7 percent, to $125.75.
CRUNCHED: Pretzel, nuts and salty snack maker Snyder’s-Lance is tumbling after it gave a weak first-quarter forecast that included more spending on marketing and lower profit margins. Snyder’s-Lance also said its CEO Carl Lee Jr. retired after 12 years with the company. Brian Driscoll will be its interim CEO. Driscoll was the CEO of Diamond Foods, a company Snyder’s-Lance bought in 2016 for more than $1 billion. Snyder’s-Lance dropped $7.41, or 18.6 percent, to $32.51.
RETURN TO SENDER: Arconic jumped after the company said CEO and Chairman Klaus Kleinfeld agreed to step down after the board of directors discovered that he sent a letter to Arconic’s largest shareholder, activist investment firm Elliott Management, without telling them. Arconic said that was “poor judgment” but didn’t say what was written in the letter.
Arconic makes aluminum, titanium and nickel parts for planes, cars and electronics. It was spun off from aluminum company Alcoa last year. Elliott has been pushing the company to replace Kleinfeld to improve returns for shareholders. The stock gained $1.23, or 4.7 percent, to $27.13.
PATH TO A NEW DEAL? Wireless spectrum license company Straight Path Communications climbed after it said it might get a new buyout offer. A week ago it agreed to be bought by AT&T for $95.63 a share in stock, or $1.25 billion. Straight Path said it was contacted by another company Thursday, and that company may make an offer to compete with AT&T’s. Straight Path stock rose $15.16, or 16.5 percent, to $106.86.
OIL: Benchmark U.S. crude lost 13 cents to $53.05 a barrel in New York. Brent crude, used to price international oils, fell 11 cents to $55.78 per barrel in London.
BONDS: Bond prices rose. The yield on the 10-year Treasury note dipped to 2.23 percent. It finished at 2.24 percent Thursday. Banks traded higher despite the decline in bond yields and interest rates.
CURRENCIES: The dollar fell to 108.44 yen from 109.16 yen. The euro rose to $1.0662 from $1.0612.
OVERSEAS: Markets in Hong Kong, France, Germany and Britain were all closed for the Easter holiday. In Japan the Nikkei 225 index gained 0.1 percent and South Korea’s Kospi added 0.5 percent.