Written by ALEX VEIGA-AP Business Writer
Stocks are closing broadly higher on Wall Street Wednesday, driving the S&P 500 and Nasdaq indexes to more record highs. Technology stocks powered much of the rally as investors focused on the latest batch of mostly solid company earnings reports. The latest gains come as worries subside about the economic impact of the virus outbreak that originated in China.
The S&P 500 index rose 21 points, or 0.7%, to 3,379. The Dow Jones Industrial Average gained 275 points, or 0.9%, to 29,551. The Nasdaq climbed 87 points, or 0.9%, to 9,725. The 10-year Treasury yield is up to 1.63%.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Stocks moved higher on Wall Street in afternoon trading Wednesday, with gains in technology companies and retailers outweighing losses elsewhere in the market.
The rally, which had the major stock indexes on track for more record highs, came as investors focused on the latest batch of mostly solid corporate earnings and weighed the latest developments in the virus outbreak that originated in China.
Health officials raised hopes that the spread of the virus is peaking after new cases dropped for a second straight day. Worries about the economic impact of the outbreak fueled a wave of selling that erased the market’s gains in January. But traders have set aside their jitters over the outbreak this month. The S&P 500 index is now up 4.6% so far this month.
“You have the continuing good news on the coronavirus potentially slowing and being under control, and that’s obviously powerful,” said Tom Martin, senior portfolio manager with Globalt Investments.
Technology stocks led the broad gains. Micron Technology climbed 4.4% and Qualcomm rose 2.4%.
Companies that rely on consumer spending, including Amazon and Nike, also did well. Dish Network and Comcast were among the big gainers in the communication services sector. Crude oil jumped 2.5% and lifted energy companies, including Hess and ConocoPhillips.
Bond prices fell. The yield on the 10-year Treasury rose to 1.63% from 1.59% late Tuesday.
The pickup in bond yields weighed on homebuilder shares. Lennar fell 1.5%. Mortgage rates tend to track the 10-year Treasury yield, so an increase in the yield means less attractive mortgage rates.
Utilities, health care and real estate companies lagged the market in another sign that investors were more confident and shifting money into investments that carry more risk.
KEEPING SCORE: The S&P 500 index rose 0.6% as of 3:41 p.m. Eastern time. The Dow Jones Industrial Average gained 262 points, or 0.9%, to 29,539.
The Nasdaq climbed 0.8%. The Russell 2000 index of smaller company stocks picked up 0.7%. Markets in Europe and Asia rose.
VIRUS UPDATE: Health officials said Wednesday that the number of new cases of the coronavirus in China dropped for a second straight day. The outbreak has infected over 45,000 people worldwide and killed more than 1,100.
Meanwhile, Chinese President Xi Jinping promised tax cuts and other aid to industry as the ruling Communist Party tries to limit the mounting damage to the economy.
TRAVEL TIDE RISES: Companies focusing on travel made some of the strongest gains. United Airlines rose 2%. Wynn Resorts climbed 3.3%. Royal Caribbean gained 3.4%.
Cruise lines, hotels and others have been more sensitive than other companies to the spread of the virus in China.
EARNINGS UPDATE: The latest batch of corporate earnings has been surprisingly good. Akamai Technologies rose 1.7% after the cloud services provider beat analysts’ profit and revenue forecasts. Generic drug developer Teva jumped 9.3% and e-commerce company Shopify soared 10.5% after reporting solid financial results.
SLOW RIDE: Ride-hailing service Lyft plunged 9.7%. Lyft stuck to a prediction that it won’t turn a profit until the fourth quarter of 2021. Rival Uber said earlier this month that it would make money in the fourth quarter of this year.
ROAD TO THE WHITE HOUSE: Wall Street appeared to largely ignore the outcome of Tuesday’s Democratic presidential primary in New Hampshire, which Bernie Sanders won, edging out moderate rival Pete Buttigieg.
Despite Sanders’ surge, it’s still not clear which of the Democratic candidates will win the nomination, Martin noted.
“The feeling has been that Sanders, if he did become the candidate, has a platform that would not appeal to the country as a whole, so that if he was the candidate, Trump would easily beat him,” he said. “As far as a more moderate candidate, those would be more competitive and that would be potentially a negative if you had a credible candidate that might make a national election between the Democrats and the Republicans competitive.”