Buoyant technology stocks lift trading on Wall Street
US stocks rose on Wednesday as technology companies traded higher for the second day in a row and consumer companies gained steam as cruise lines rose. The beleaguered financial sector recovered some of its losses from earlier this year.
Stocks started the day sharply higher, following a jump in European markets, although they returned some of those gains as the day wore on. Oil prices followed the same pattern and finished a few cents higher.
Cruise lines rose after Carnival posted strong first-quarter results, and the dollar weakened further. Stocks are up about 7% this month, part of a rally that has cancelled out their losses from a disastrous start to the year.
"The Fed really cured a lot of global ills" by deciding to go slower in raising interest rates, said John Cannally, chief economic strategist for LPL Financial. The Federal Reserve announced that decision two weeks ago, and Fed Chair Janet Yellen emphasised it again in a speech on Tuesday.
The Dow Jones industrial average rose 83.55 points, or 0.5%, to 17,716.66. The Standard & Poor's 500 index gained 8.94 points, or 0.4%, to 2,063.95. The Nasdaq composite index added 22.67 points, or 0.5%, to 4,869.29.
Banks and insurance companies made the biggest gains. MetLife gained 2.27 US dollars, or 5.3%, to 44.73 US dollars after the company successfully challenged its "too big to fail" designation.
The Financial Stability Oversight Council had said MetLife needed greater government oversight because of its size and importance to the financial system, but the company took the council to court over that ruling. On Wednesday a judge ruled in its favour.
Fellow insurer AIG advanced 1.13 US dollars, or 2.1%, to 54.52 US dollars and Prudential rose 1.43 US dollars, or 2%, to 72.95 US dollars. Banks also traded higher.
Apple led the gains among technology companies. Its stock rose 1.88 US dollars, or 1.7%, to 109.56 US dollars. The world's largest publicly traded company is at its highest price since mid-December. Visa gained 1.40 US dollars, or 1.9%, to 76.78 US dollars.
After two weeks of mixed trading, stocks started moving higher late on Tuesday, when Ms Yellen said the central bank expects to proceed slowly in raising interest rates. The market is now on pace for its best month since October, and the Dow and S&P 500 are higher for the year. In February they were each down 10%.
"You really had a year's worth of volatility in one quarter and we're back where we started," said Mr Cannally. Companies will start reporting their first-quarter earnings in two weeks, and Cannally said that may determine what the market does next.
Cruise line operator Carnival got a boost after its first-quarter results were better than analysts expected, and the company raised its profit projections for the year. The stock gained 2.73 US dollars, or 5.5%, to 52.37 US dollars and competitor Royal Caribbean Cruises jumped 4.30 US dollars, or 5.7%, to 80.35 US dollars.
Railway operator Norfolk Southern added 1.95 US dollars, or 2.4%, to 84.75 US dollars after it said it is open to a possible sale to Canadian Pacific, but only if Canadian Pacific offers a better price and regulators approve the structure of the deal. Norfolk Southern has rejected three offers from Canadian Pacific worth about 30 billion US dollars. Rival CSX picked up 41 cents, or 1.6%, to 26.30 US dollars.
US companies added 200,000 jobs in March, according to a survey of private employers by ADP, a payroll processing company. The survey showed companies in construction, retail and shipping continued to bring on new workers, and it suggests hiring continues in the US. The federal government will release its monthly jobs report on Friday.
Canadian yoga-wear company Lululemon gained 6.56 US dollars, or 10.7%, to 67.80 US dollars after it disclosed strong fourth-quarter sales.
Acadia Pharmaceuticals rose after a Food and Drug Administration panel made a positive recommendation for Acadia's drug Nuplazid, which is intended to treat psychotic delusions and behaviours that harm patients with Parkinson's disease. The stock climbed 2.20 US dollars, or 9.2%, to 26.01 US dollars.
Payroll processor Paychex lost 1.20 US dollars, or 2.2%, to 53.29 US dollars as investors were unimpressed with its fiscal third-quarter results. The stock has climbed over the last two months and is near all-time highs.
US crude rose four cents to 38.32 US dollars a barrel in New York. Brent crude, the benchmark for international oil prices, rose 12 cents to 39.26 US dollars a barrel in London.
The dollar continued to weaken. The euro rose to 1.1333 from 1.1295 US dollars and the dollar fell to 112.47 yen from 112.75 yen. Bond prices slipped, returning some of Tuesday's gains. The yield on the 10-year U.S. Treasury note rose to 1.83% from 1.80%.
France's CAC-40 climbed 1.8%, while Germany's Dax and the FTSE 100 in Britain each rose 1.6%. Asian stocks were mixed after the Asian Development Bank said economies in the region will grow at a slower pace in 2016 and 2017 because of reduced growth in China and a weak recovery in other major industrial economies. Tokyo's Nikkei 225 lost 1.3% as the yen continued to strengthen. Hong Kong's Hang Seng index climbed 2.1%. South Korea's Kospi rose 0.4%.
Gold fell 8.90 US dollars to 1,226.90 US dollars an ounce. Silver slipped two cents to 15.21 US dollars an ounce, while copper fell two cents to 2.19 US dollars a pound.
In other energy trading, wholesale petrol fell 2 cent to 1.44 US dollars a gallon. Heating oil was little changed at 1.16 US dollars a gallon. Natural gas climbed 2 cents to 2 US dollars per 1,000 cubic feet.