Written by ALEX VEIGA-AP Business Writer
(AP) — Stocks moved broadly higher in afternoon trading on Wall Street Thursday after several large companies delivered surprisingly good results. The gains had the market on track to claw back modest losses from a day earlier.
A breakthrough in negotiations over Britain’s exit from the European Union also injected confidence into markets and prompted investors to move money into riskier holdings.
Health care stocks led accounted for a big slice of the market’s gains. Communication services and industrial companies also rose. Technology stocks were the only laggard.
Netflix rose after handily beating Wall Street’s third-quarter profit forecasts. Solid earnings from conglomerate Honeywell and railroad CSX lifted industrial stocks. Traders also bid up shares in Morgan Stanley after the bank reported reporting solid third-quarter results.
Bond prices fell. The yield on the 10-year Treasury note rose to 1.76% from 1.74% late Wednesday.
Investors have shifted their focus this week to the latest round of corporate earnings after weeks of turbulence on Wall Street as the market reacted to developments in the trade war between the U.S. and China.
Several companies have turned in surprisingly good results and outlooks, which has so far managed to ease some investors’ concerns over the economy. But the trade war red flags remain.
“About 76% of those that have reported have beat on earnings,” said Adam Taback, deputy chief investment officer at Wells Fargo Private Bank.
The forecasts from companies haven’t been as negative as many expected, Taback said, but many have raised concerns about “slowing global growth and risk of trade wars.”
Coca-Cola, American Express and Schlumberger report their results Friday.
KEEPING SCORE: The S&P 500 index was up 0.4% as of 3:36 p.m. Eastern time. The Dow Jones Industrial Average added 54 points, or 0.2% to 27,056.
The Nasdaq gained 0.4%. The Russell 2000 index of smaller stocks did much better than other indexes, climbing 1.1%.
STREAMING PROFIT: Netflix rose 2.9%. The profit beat came even as revenue and subscriber growth fell short of forecasts, though some investors had been bracing for an even bigger letdown.
The company is facing major threats to its video streaming service from Apple and Disney, among others. That, and investors’ concerns about subscriber growth, have been weighing on the stock recently, pulling it down 22% from a recent peak in early July.
FEELING HEALTHY: October has been good for health care stocks, and this week is now exception. The sector is up 2.3% for the month so far and 2.6% this week. By comparison, the S&P 500 index is up about 1% for the week and 0.8% for the month.
Even with the recent gains, health care stocks are well behind most other sectors, with only a 6.6% gain for the year. Most other sectors are up by double digit percentages.
RIGHT TRACK: CSX rose 1.5% after the railroad beat Wall Street’s third-quarter profit forecasts. The company compensated for a 5% decline in shipping volume by cutting costs.
OVERSEAS: Major stock indexes in Europe closed mostly lower after Britain and the European Union reached a tentative deal over their pending separation. Britain is set to leave the trading bloc on Oct. 31 and both sides want a deal to regulate trade and other issues.
The deal must still be approved by the bloc and ratified by the European and U.K. Parliaments. It faces a potentially tough road to approval in Britain’s Parliament.