Tech and high-growth stocks take US indexes higher - InfoNews

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Tech and high-growth stocks take US indexes higher

January 25, 2019 - 11:46 AM

NEW YORK - U.S. stocks are climbing Friday and technology companies and consumer-focused companies were leading the gains. Optimism over economic growth is boosting industrial and energy companies, along with banks and makers of basic materials.

Markets didn't react much to news that President Donald Trump and congressional leaders reached a deal to reopen the federal government for three weeks while talks continue over Trump's demands for money to build a wall along the U.S. border with Mexico.

KEEPING SCORE: The S&P 500 index rose 22 points, or 0.8 per cent to 2,664 as of 2:42 p.m. Eastern time. The Dow Jones Industrial Average rose 172 points, or 0.7 per cent, to 24,726. The Nasdaq composite rose 85 points, or 1.2 per cent, to 7,160. The Russell 2000 index of smaller company stocks rose 16 points, or 1.1 per cent, to 1,480.

MIXED TECH: Hard drive maker Western Digital jumped 5.8 per cent to $42.47 after the company said it expects business to improve in the second half of its fiscal year. That overshadowed a weaker-than-expected second quarter. Competitor Seagate Technology also gained 5.7 per cent to $43.31.

Those gains outweighed disappointing quarterly results and a weak outlook from the world's largest chipmaker, Intel. The company is also still without a permanent CEO, following Brian Krzanich's resignation in June. Shares fell 5.8 per cent to $46.84.

Other tech stocks climbed. Apple rose 2.7 per cent to $156.71 and Microsoft picked up 1.1 per cent to $107.41.

FED CAUTION: The Wall Street Journal is reporting that the Federal Reserve might soon halt the shrinking of its bond portfolio. The Fed bought trillions of dollars in bonds following the recession in 2008 to help keep interest rates low and aid an economic recovery. It started gradually letting its portfolio shrink recently, but investors are concerned that will tighten credit conditions, which could slow economic growth.

"Although the economic data are pretty solid right now, the markets have basically told us that we are not tolerating additional tightening," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott.

CAFFEINE RUSH: Starbucks shares jumped 2.6 per cent to $66.41 after the company reported revenue and profit growth with the help of a strong holiday season. The results topped expectations and the company gave an upbeat outlook for the year. Other consumer-focused companies also moved higher. Amazon added 0.8 per cent to $1,667 and Home Depot climbed 1.5 per cent to $180.03.

GROW ON: Industrial companies benefited from greater optimism about future economic growth. Boeing rose 1.4 per cent to $363.37 and General Electric gained 4.3 per cent to $9.15. Among banks, Citigroup rose 2.3 per cent to $64.14.

High-dividend stocks lagged the rest of the market. Investors tend to prefer "defensive" stocks like utilities and household goods makers when they are more fearful about the economy.

Bond prices also fell. The yield on the 10-year Treasury note rose to 2.75 per cent from 2.71 per cent.

TAKEN ILL: Abbvie fell 6.2 per cent to $80.67 after the company said international sales of its drug Humira weakened in response to growing competition in key markets including Europe. AbbVie gets most of its revenue from Humira, which is the top-selling prescription medication in the world in terms of revenue.

Cowen & Co. analyst Steve Scala said Humira sales outside the U.S. were worse than expected

BUMPY FLIGHT: Airlines stocks were jolted after widespread delays were reported at LaGuardia Airport in New York and Newark Liberty International in New Jersey. The Federal Aviation Administration said the cause was a "slight increase in sick leave" at East Coast air traffic control centres in Jacksonville, Florida and Washington D.C.

The month-long partial shutdown of the federal government means air traffic controllers and other FAA employees are working without pay or being furloughed.

JetBlue lost 1.7 per cent to $17.84 after strong gain the day before and Alaska Air fell 4.5 per cent to $62.85 following its fourth-quarter report. America surged 4 per cent to $34.99.

OVERSEAS: France's CAC 40 rose 1.1 per cent, while Germany's DAX gained 1.4 per cent as both indexes finished the week with solid gains. Britain's FTSE 100 fell 0.1 per cent and finished the week down 2.3 per cent. The country is moving closer to leaving the European Union without a trade deal, meaning Britain still faces tariffs and economic turmoil if its situation doesn't change before March 29.

Japan's benchmark Nikkei 225 rose 1 per cent, South Korea's Kospi surged 1.5 per cent and Hong Kong's Hang Seng gained 1.6 per cent.

ENERGY: U.S. crude oil rose 1.1 per cent to settle at $53.69 a barrel in New York. Brent crude, used to price international oils, rose 0.6 per cent to $61.47 in London.

CURRENCIES: The dollar rose to 109.79 yen from 109.53 yen. The euro rose to $1.1407 from $1.1389.

News from © The Associated Press, 2019
The Associated Press

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