Third straight gain for US markets as healthcare firms lead rally
Healthcare and technology companies powered stocks broadly higher on Wall Street on Wednesday, giving the market its third straight gain.
Boeing briefly dipped, but finished slightly higher, after the US said it was joining other countries in grounding the company’s 737 Max 8 plane following a fatal crash of an Ethiopian airliner over the weekend.
The S&P 500 has now clawed back all its losses from last week, when the benchmark index posted its worst week since December.
The market has rebounded this week even though the costly trade dispute between the US and China has yet to be resolved and the outlook for corporate earnings growth has dimmed this year.
A batch of economic reports helped drive the latest rally, giving investors more reason to have an upbeat view of the economy. Oil prices rose after new government data showed lower-than expected stockpiles.
“I’m still scratching my head to find out what kind of an upside catalyst we’ve actually gotten, other than just maybe an aggregate of relatively positive economic reports that individually aren’t enough to move the market,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab.
“Frankly, this rally has been much stronger than even that would explain, so I’m a bit puzzled by it.”
The S&P 500 gained 19.40 points, or 0.7%, to 2,810.92. The Dow Jones Industrial Average rose 148.23 points, or 0.6%, to 25,702.89.
The Nasdaq composite climbed 52.37 points, or 0.7%, to 7,643.41. The Russell 2000 index of smaller companies picked up 6.05 points, or 0.4%, to 1,555.88.
Major stock indexes in Europe also finished higher.
The three-day rally has helped the market reclaim the momentum it had in January and February, when it posted the best two-month start to a year since 1991. The S&P 500, Nasdaq, Dow and Russell 2000 are showing double-digit gains for the year so far.
A burst of late-afternoon buying reversed a slide in Boeing shares.
The stock briefly headed lower after the US moved to temporarily ground all the aircraft manufacturer’s 737 Max 8 and Max 9 planes in the wake of Sunday’s deadly crash of an Ethiopian Airlines 737 Max 8, which killed 157 people.
Boeing shares finished with a 0.5% gain. The stock slumped more than 11% the first two days of this week. Despite the recent slide, the stock is still up 16.9% for the year.
Healthcare sector stocks notched the biggest gain on Wednesday.
Rite Aid jumped 6.1% after the drugstore chain announced a purge of its top management and plans to cut 400 full-time jobs.
CEO John Stanley will step down when the company finds a replacement. Chief financial officer Darren Kast and chief operating officer Kermit Crawford are also among the executives leaving the company.
Chipmaker Nvidia added 3.8%, leading technology sector stocks higher. Synchrony Financial gained 2.2% amid a broad financial sector rally.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.62% from 2.60%.
The price of US crude oil climbed 2.4% to settle at 58.26 US dollars (£43.73) a barrel while Brent crude gained 1.3% to close at 67.55 US dollars (£43.73) a barrel.