NEW YORK -- Technology companies, banks and industrial companies all rose Thursday as investors got ready for big banks to announce their first-quarter results and let go of some of their concerns about the trade dispute between the United States and China.
Big tech companies such as Apple and Microsoft, the market's leaders over the past year, rose again. Industrial companies including Boeing and Caterpillar gained ground as well, with airlines climbing after Delta reported solid results in the first quarter. Bond prices dropped and interest rates rose, which helped banks.
The S&P 500 index gained 21.80 points, or 0.8 percent, to 2,663.99. The Dow Jones industrial average added 293.60 points, or 1.2 percent, to 24,483.05. The Nasdaq composite climbed 71.22 points, or 1 percent, to 7,140.25. The Russell 2000 index of smaller-company stocks advanced 10.52 points, or 0.7 percent, to 1,557.33.
This morning, JPMorgan Chase, Wells Fargo and PNC Financial Services will report their first batch of quarterly results since last year's corporate tax cut went into effect. Alicia Levine, head of global investment strategy at BNY Mellon Investment Management, said that's giving investors something new to focus on after almost six weeks of worrying about a trade war.
"Part of the reason that markets were strong this week is in anticipation of perhaps better than expected earnings," she said. Levine said she thinks companies are likely to beat Wall Street's expectations thanks in part to the lower tax rate.
The market has been jittery as investors worried about tariffs and other barriers to trade. Investors may have been pleased to hear that, according to a group of legislators, President Donald Trump asked advisers to explore the possibility of the United States rejoining trade talks with 11 Pacific nations. Those countries formalized a deal last month after Trump rejected the Trans-Pacific Partnership, an earlier agreement that involved the United States.
The S&P 500, a benchmark that is used by many index funds, has fallen for three of the past four weeks, but it's up 2.3 percent so far this week as investors felt new proposals by Chinese President Xi Jinping could help avert a trade war. On Thursday China's government denied that Xi was trying to resolve the dispute and said negotiations with the United States aren't possible right now.
Levine, of BNY Mellon, said the tariffs the United States and China have proposed won't stop the growth of the U.S. economy, but they could cause real pain for some industries and investors sold stocks in response to that.
"If you use steel and aluminum, you might be less likely to open up another plant if you're a manufacturer," she said. "You might be less likely to raise wages."
Bond prices fell. The yield on the 10-year Treasury note rose to 2.84 percent from 2.79 percent. That helped banks because higher yields mean they can make more money from mortgages and other types of loans. Big dividend stocks such as utilities and household goods companies fell, as investors see them as an alternative to bonds and they are less interested in buying them when yields rise.
Oil prices continued to trade at three-year highs. Benchmark U.S. crude rose 0.4 percent to $67.07 a barrel in New York. Brent crude, used to price international oils, shed 0.1 percent to $72.02 a barrel in London.
Business on 04/13/2018