Slight Gains Lift Stocks to New Highs 09/19 16:45
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
(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
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 law 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
"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
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
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 2.25 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.
Progressive gained 2.9 percent after the insurer reported
lower-than-expected losses from Hurricane Harvey. The company is the second
insurer to report losses related to the hurricane, which battered Texas and
Louisiana last month, that were far less than financial analysts expected.
Progressive shares rose $1.32 to $47.63.
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
Several health insurers and hospital operators were trading lower after top
Senate Republicans said Tuesday that their last-ditch effort to overhaul the
Affordable Care Act is gaining momentum.
Envision Healthcare sank $4.56, or 9.6 percent, to $43.11. Humana slid
$8.41, or 3.4 percent, to $240.04. Centene, which administers Medicaid programs
and sells health plans to the ACA's exchanges, lost $4.80, or 5.1 percent, to
Investors welcomed news that Post Holdings, maker of cereals such as Honey
Bunches of Oats and Fruity Pebbles, agreed to acquire Bob Evans Farms in a deal
worth about $1.53 billion.
Shares in Bob Evans, a maker of refrigerated side dishes, gained $4.48, or
6.1 percent, to $77.41. Post added 52 cents, or 0.6 percent, to $86.36.
Traders were less enthused by word that the Federal Trade Commission signed
off on a deal for Walgreens Boots Alliance to buy 2,186 Rite Aid stores for
$5.19 billion. That amounts to a much smaller deal than the companies
originally sought when Walgreens pushed to buy Rite Aid. The companies
abandoned that deal following opposition from regulators. Rite Aid shares lost
33 cents, or 12.1 percent, to $2.40. Walgreens slid $1.39, or 1.7 percent, to
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