US Stocks Post Broad Gains 09/19 11:49
Technology companies led broad gains for stocks on Wall Street in morning
trading Thursday, extending the market's gains from a day earlier.
(AP) -- Technology companies led broad gains for stocks on Wall Street in
morning trading Thursday, extending the market's gains from a day earlier.
Microsoft led the tech stock rally, climbing 2.1%, as traders welcomed the
software giant's decision to boost its quarterly dividend and approve a $40
billion stock buyback. Technology is up 31.8% this year, outpacing the other 10
sectors in the S&P 500.
Health care and communications services stocks also notched solid gains.
Medtronic rose 1.1% and Facebook added 1.3%.
Energy stocks, which rallied earlier in the week as crude oil prices soared
following an attack on key oil facilities in Saudi Arabia, were the only
laggard. Hess slid 2.4%.
Bond prices fell, pushing up the yield on the 10-year Treasury to 1.79% from
1.78% late Wednesday. The rise in bond yields helped lift financial sector
stocks. Synchrony Financial gained 1.1%. Higher bond yields drive up interest
rates on mortgages and other consumer loans, making them more profitable for
The latest gains came a day after the Federal Reserve cut its benchmark
interest rate for a second time this year. The Fed failed to indicate whether
more rate cuts were likely this year, though the central bank left the door
open for additional rate cuts if the economy weakens.
The Fed is lowering interest rates in a bid to combat slowing global
economic growth and uncertainty over U.S. trade conflicts, among other threats
to the U.S. economy.
Washington and Beijing were set to begin trade talks Thursday ahead of more
formal negotiations set for next month.
Markets have rallied this month after both sides took steps to ease tensions
in advance of the talks. That's fueled speculation among investors that the
U.S. and China may at least reach an interim deal in their costly trade war.
Meanwhile, France's finance minister said Europe is ready to impose
retaliatory tariffs next year on U.S. goods as part of a long-running dispute
over subsidies to plane makers Airbus and Boeing.
KEEPING SCORE: The S&P 500 index was up 0.4% as of 11:46 a.m. Eastern Time.
The Dow Jones Industrial Average gained 89 points, or 0.3%, to 27,236. The
Nasdaq, which is heavily weighted with technology stocks, added 0.5%. Traders
were favoring smaller company stocks, sending the Russell 2000 index 0.8%
Major stock indexes in Europe were broadly higher. Indexes in Asia were
ANOTHER RATE CUT: The Fed cut its benchmark interest rate by a quarter of a
percentage point on Wednesday, in a widely expected move. The rate, which is
now at a range of 1.75% to 2%, influences many consumer and business loans.
The market initially sold off on the news, however, after the Fed revealed
that its panel of policymakers is divided about the upcoming path for interest
rates. Stocks rebounded after Fed Chairman Jerome Powell said the central bank
would be ready to take action if the economy weakened.
The Fed is trying to keep the U.S. economic expansion from being derailed by
uncertainties over the U.S. trade war with China, slower global growth and a
slump in American manufacturing.
The Fed's wasn't the only interest rate decision to be digested.
The Bank of England also kept its main interest rate on hold at 0.75% with
rate-setters opting to sit tight while waiting for some clarity to emerge on
Britain's exit from the European Union. And Japan's central bank opted to keep
its own monetary policy unchanged and its key interest rate at minus 0.1%. The
decision came amid signs of weaker consumer demand and exports and dimming
confidence in the business outlook.
HOME SWEET HOME: The National Association of Realtors said that sales of
previously occupied U.S. homes climbed last month to a seasonally adjusted
annualized rate of 5.49 million units, the best performance since March 2018.
Sales have increased 2.6% from a year ago.
Mortgage rates have been hovering near historic lows, making buyers more
eager to purchase a home despite rising prices amid a shortage of properties
Homebuilders marched broadly higher. PulteGroup gained 1.6%.
NOT SO TOUGH: U.S. Steel dropped 11.3% after it warned investors that its
third quarter loss will be wider than anticipated.
UNAPPETIZING RESULTS: Darden Restaurants fell 3.8% after the owner of the
Olive Garden and other restaurant chains reported first quarter results that
disappointed investors. The company's earnings topped Wall Street's forecasts,
but other performance metrics lagged amid weaker sales at some of Darden's
ENERGY: Oil prices rose again as traders continued to assess the impact of
the attack on Saudi production over the weekend. Benchmark U.S. crude was up
0.6% to $58.45 a barrel and is up 6.5% this week. Brent crude, the
international standard, was up 1.3% to $64.44.