Gains for banks and retailers take stocks to record highs
AP Markets Writer
NEW YORK – U.S. stocks rose to record highs Tuesday as banks kept rising and retailers climbed after some encouraging job data.
It was the second straight day for big gains in bank stocks as bond yields pushed higher, which allows banks to charge higher rates on loans. Retailers rose after the Labor Department said job openings and hiring both grew in July, and more people quit their jobs to take new ones. That left investors hopeful people will shop and spend more.
Chemicals company DowDuPont climbed after making changes to its breakup plans, something activist investors had pushed for. Apple’s newest iPhones didn’t generate much excitement on Wall Street.
The bond market is “moving back to a comfort zone,” said Matt Toms, the chief investment officer for Voya Investment Management’s fixed income business. “Just enough growth, just enough inflation, but not too much of either.”
The Standard & Poor’s 500 index rose 8.37 points, or 0.3 percent, to 2,496.48. The Dow Jones industrial average gained 61.49 points, or 0.3 percent, to 22,118.86. The Nasdaq composite picked up 22.02 points, or 0.3 percent, to 6,454.28.
The S&P 500 finished at a record Monday and the Dow finished a fraction of a point above the record it set in early August. The Nasdaq surpassed the record it set on Sept. 1.
The Russell 2000 index of smaller companies got a bigger boost from the job openings report and jumped 8.64 points, or 0.6 percent, to 1,423.46.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.16 percent after it jumped to 2.13 percent Monday. That helped banks. Bank of America added 59 cents, or 2.5 percent, to $23.95 while Citizens Financial Group gained $1.02, or 3 percent, to $34.48. Companies that pay big dividends like utilities and real estate investment trusts didn’t do as well as the rest of the market, as income-seeking investors were drawn to bonds.
Stocks were coming off their best day since late April. They rose Monday as Hurricane Irma weakened without doing as much damage as some forecasts had predicted last week. Investors were also relieved that tensions between the U.S. and North Korea didn’t get any worse following a national holiday there.
DowDuPont, which was formed when two of the world’s largest chemical companies combined in August, made some changes to its breakup plan after pressure from activist investors. DowDuPont will ultimately break up into three public companies. One will focus on agriculture, one on material science and one on specialty products. Tuesday’s changes concern the latter two companies.
DowDuPont gained $1.67, or 2.5 percent, to $68.52.
Job openings posted by U.S. employers rose 0.9 percent to 6.2 million in July, the Labor Department said. That’s highest on records dating to 2000. Hiring also increased and more people quit their jobs, which often means they are leaving for jobs that pay better. That helped smaller, domestically-focused companies and retailers. Gap jumped $1.67, or 6.4 percent, to $27.61 and Victoria’s Secret parent L Brands advanced $1.46, or 3.9 percent, to $39.36.
Apple’s stock gyrated as the company announced its newest iPhones and updates to other products. The new iPhone 8 will be able to shoot pictures with better colors and less distortion, particularly in low-light settings, and it will be out Sept. 22. The iPhone X has an edge-to-edge screen and can be unlocked with facial recognition, but won’t go on sale until Nov. 3.
The iPhone is the source of most of Apple’s revenue, and some investors have been worried that supply constraints will slow down its sales. Apple was down early in the day, climbed as much as 1.5 percent as it made its announcements, and then wound up with a loss of 64 cents to $160.86.
Energy companies traded higher as benchmark U.S. crude added 16 cents to $48.23 a barrel in New York. Brent crude, the standard for international oil prices, gained 43 cents to $54.27 a barrel in London.
Wholesale gasoline rose 2 cents to $1.66 a gallon. Heating oil remained at $1.74 a gallon. Natural gas climbed 5 cents to $3 per 1,000 cubic feet.
Gold lost $3 to $1,332.70 an ounce. Silver dipped 1 cent to $17.89 an ounce. Copper fell 3 cents to $3.04 a pound.
The dollar rose to 110.11 yen from 109.34 yen. The euro edged up to $1.1970 from $1.1962. The British pound climbed to $1.3293 from $1.3173, its highest level in a year. That move came after inflation figures came in stronger than analysts expected, which left investors thinking the Bank of England may raise interest rates sooner than they had anticipated.
Germany’s DAX rose 0.4 percent while the CAC 40 in France gained 0.6 percent. The British FTSE 100 slipped 0.2 percent. In Japan, the Nikkei 225 gained 1.2 percent as the yen weakened again. South Korea’s Kospi edged up 0.3 percent and the Hang Seng of Hong Kong was little changed.