Slight gains in US stocks lift Dow, S&P, Nasdaq to new highs

 

September 20, 2017



(AP) — Wall Street capped a day of mostly listless trading Tuesday with a slight gain, good enough to lift the major U.S. stock indexes to another set of all-time highs.

Banks, insurers and other financial companies led the gainers. Technology companies also helped lift the market. Health care stocks lagged the most, pulling down insurers, hospital operators and other companies as a Republican effort to repeal President Barack Obama’s health care bill appeared to gain momentum. Oil prices fell.

Trading was subdued overall as investors looked ahead to Wednesday, when the Federal Reserve was expected to deliver an update on the central bank’s view of the economy and the timing of its plans to raise interest rates and shrink its bond holdings.

“People are still, as they usually are the day before a Fed announcement, kind of in a wait-and-see mode,” said Lindsey Bell, investment strategist at CFRA Research.

The Standard & Poor’s 500 index rose 2.78 points, or 0.1 percent, to 2,506.65. The index, regarded as the broadest measure of the stock market, has hit a record high three days in a row.

The Dow Jones industrial average gained 39.45 points, or 0.2 percent, to 22,370.80. The average is on a six-day streak of new highs.

The Nasdaq composite added 6.68 points, or 0.1 percent, to 6,461.32. The tech-heavy index also notched a new high, its first since last Wednesday.

The Russell 2000 index of smaller-company stocks declined 0.68 points, or 0.1 percent, to 1,440.40.

The major stock indexes wavered in early trading, but recovered to hold their small gains by afternoon. Investors sized up new economic data that showed the pace of U.S. home construction slowed in August due to a steep drop in apartment construction. A separate report on business confidence showed CEO optimism reached its highest level since early 2014.

Mostly, though, investors were focused on what the Fed will have to say on Wednesday.

Forecasters expect the Fed to leave interest rates unchanged and stick to plans to raise rates in December. But traders will be listening for word on whether the central bank is ready to begin shrinking its multitrillion-dollar stockpile of bonds.

Such a move would allow the Fed to effectively raise interest rates without touching its key short-term rate, known as the federal funds rate, said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.

“That’s the most important aspect here,” Blancato said. “That does have an impact on the bond market, and you see the bond market going slightly higher here over the last two days.”

Bond prices fell Tuesday, sending the yield on the 10-year Treasury note up to 2.24 percent from 2.23 percent late Monday.

Speculation that the Fed will announce plans to unwind its bond portfolio helped lift shares in banks and other financial companies. Such a move by the Fed would likely push long-term interest rates up. Banks benefit from higher rates, which can translate into higher profits from lending money. U.S. Bancorp added 78 cents, or 1.5 percent, to $53.16. Wells Fargo & Co. rose 65 cents, or 1.2 percent, to $53.36.

Technology stocks were also among the big movers. The sector is the biggest gainer this year, up 26 percent. NetApp climbed $1.08, or 2.7 percent, to $41.71.

Energy futures closed lower.

Benchmark U.S. crude fell 43 cents, or 0.9 percent, to settle at $49.48 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, gave up 34 cents, or 0.6 percent, to close at $55.14 a barrel in London.

Wholesale gasoline slid 1 cent to $1.66 a gallon. Heating oil fell 1 cent to $1.77 a gallon. Natural gas declined 2 cents to $3.12 per 1,000 cubic feet.

In metals trading, gold slipped 20 cents to $1,310.60 an ounce. Silver gained 12 cents to $17.28 an ounce. Copper held steady at $2.97 a pound.

The dollar rose to 111.50 yen from 111.47 yen on Monday. The euro strengthened to $1.1997 from $1.1953.

Global shares were mixed Tuesday.

In Europe, Germany’s DAX was flat, while France’s CAC 40 rose 0.2 percent. The FTSE 100 index of leading British shares gained 0.3 percent. In Asia, Japan’s benchmark Nikkei 225 added nearly 2.0 percent coming off a national holiday on Monday. Australia’s S&P/ASX 200 edged down 0.1 percent, while South Korea’s Kospi lost nearly 0.1 percent. Hong Kong’s Hang Seng fell nearly 0.4 percent.

 
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