Banks and tech stocks send Dow industrials closer to 22,000
AP Markets Writer
NEW YORK – Banks and technology companies took U.S. stocks higher Tuesday, and less-loved sectors including phone and real estate companies also climbed as companies continued to report strong second-quarter results.
Payment processors also made hefty gains, while Sprint said it gained wireless subscribers and that it’s open to combining with a competitor or a cable company. Royal Caribbean Cruises, Xerox and shopping mall operator Simon Property Group all climbed, while athletic apparel maker Under Armour and industrial companies fell after disappointing results. General Motors and Ford slumped on weak July sales reports.
Some of the largest gains went to companies and industries that have struggled this year, like real estate investment trusts, or which have missed out on the gains entirely, like phone companies. Randy Frederick, vice president of trading and derivatives at the Schwab Center for Financial Research, said the shift is a good sign for the stock market.
“When people are willing to go out and do the proverbial bargain hunting in areas that have not outperformed as much, that shows confidence,” he said. “The broader the bull market becomes, the more sectors that participate, the more sustainable it becomes.”
The Standard & Poor’s 500 index rose 6.05 points, or 0.2 percent, to 2,476.35. The Dow Jones industrial average climbed 72.80 points, or 0.3 percent, to 21,963.92. The blue chip index closed at a record high for the fifth day in a row. Nasdaq composite added 14.82 points, or 0.2 percent, to 6,362.94. The Russell 2000 index of smaller-company stocks gained 3.19 points, or 0.2 percent, to 1,428.33.
Banks helped lead the way. The top gainers included JPMorgan Chase, which rose $1.23, or 1.3 percent, to $93.03 and Citigroup, which added $1.15, or 1.7 percent, to $69.60.
Intel rose as South Korean regulators signed off on its deal for Mobileye. Mobileye makes software that processes information from cameras and other car sensors to decide where an autonomous car should steer, and Intel agreed to buy it for $15 billion in March. Intel gained 88 cents, or 2.5 percent, to $36.35.
Tech could be in for more gains Wednesday. Apple reported a strong quarter after the closing bell on Tuesday, and its stock rose 4.7 percent in after-hours trading. Apple reported earnings and revenue that far exceeded analysts’ forecasts, and issued a solid outlook for the fourth quarter, when the company is expected to launch a 10th anniversary version of the iPhone.
Sprint had its best day this year after it said it’s open to combining with another phone company or a cable company. The fourth-largest U.S. wireless carrier also reported its first quarterly profit in three years as it cut cost and added wireless subscribers. Sprint rose 89 cents, or 11.2 percent, to $8.87.
T-Mobile USA climbed $1.41, or 2.3 percent, to $63.07 and Verizon Communications gained 49 cents, or 1 percent, to $48.89. Phone companies, real estate firms and utility all benefited because bond yields fell, which made the companies more attractive to investors who want income.
Utility company Scana continued to rise after it said it will end construction of two nuclear reactors that customers have already paid billions to build. Scana’s South Carolina Electric & Gas unit and state-owned Santee Cooper say they have already spent $10 billion on the project and that it could cost $20 billion to finish. The companies blamed years of delays and cost overruns, and Westinghouse, the primary contractor, filed for bankruptcy protection earlier this year.
Scana rose $3.19, or 5 percent, to $67.56 on top of a 5 percent gain on Monday.
Cruise line operator Royal Caribbean beat analysts’ forecasts and raised its estimates for the year. It climbed $3.8, or 3.4 percent, to $116.87 and competitor Carnival advanced 70 cents, or 1 percent, to $67.48.
Under Armour cut its annual revenue forecast as sharp discounts continue to affect its business in North America. The Baltimore company said it will eliminate 280 jobs and is aiming to reduce $110 million to $130 million in annual spending through a restructuring plan. Under Armour sank $1.72, or 8.6 percent, to $18.30, and it’s down 52 percent since late October. Rival Nike added 79 cents, or 1.3 percent, to $59.84.
Oil prices plunged after a six-day rally. U.S. crude shed $1.01, or 2 percent, to $49.16 a barrel in New York. Brent crude, the international standard, dropped 94 cents, or 1.8 percent, to $51.78 a barrel in London.
Wholesale gasoline lost 2 cents to $1.66 a gallon. Heating oil fell 3 cents to $1.64 a gallon. Natural gas rose 3 cents to $2.82 per 1,000 cubic feet.
Bond prices climbed. The yield on the 10-year Treasury note dipped to 2.25 percent from 2.30 percent.
Gold added $6 to $1,279.40 an ounce. Silver lost 2 cents to $16.76 an ounce. Copper dipped 1 cent to $2.88 a pound.
The dollar rose to 110.30 yen from 110.24 yen. The euro slid to $1.1801 from $1.1831.
The DAX in Germany DAX rose 1.1 percent. Britain’s FTSE 100 and the French CAC 40 both rose 0.7 percent. Japan’s benchmark Nikkei 225 index added 0.3 percent while South Korea’s Kospi climbed 0.8 percent. In Hong Kong, the Hang Seng gained 0.8 percent.