Tech companies power U.S. stocks to solid weekly gain
In this March 5, 2019, file photo trader Gregory Rowe works on the floor of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EDT on Friday, March 15. (AP Photo/Richard Drew, File)
Damian J. Troise and Alex Veiga, The Associated Press
Published Friday, March 15, 2019 5:25PM EDT
Wall Street finished the week with solid gains Friday as technology stocks notched their best week in four months.
Financial, health care and consumer stocks joined in the market rally. The gains erased losses from last week, when the S&P 500 had its worst week of the year. The benchmark index has now posted a weekly gain nine out of 11 times this year.
Technology stocks had their best week since November. Apple ended the week with a 7.6 per cent gain, its best week since August. Industrial stocks were the biggest laggard Friday.
Investors bought bonds after a report on industrial production showed a second consecutive monthly decline in manufacturing in the U.S. That sent the yield on the 10-year Treasury lower. It fell to 2.59 per cent from 2.63 late Thursday.
Despite the gains, global political turmoil over trade and more still weighs on investors, said Katie Nixon, chief investment officer at Northern Trust Wealth Management.
"There's so much importance placed on these geopolitical risks," Nixon said. "They have to be resolved for the market to go forward."
The S&P 500 index gained 14 points, or 0.5 per cent, to 2,822.48. The Dow Jones Industrial Average rose 138.93 points, or 0.5 per cent, to 25,848.87.
The Nasdaq composite climbed 57.62 points, or 0.8 per cent, to 7,688.53. The Russell 2000 index of smaller companies picked up 3.90 points, or 0.3 per cent, to 1,553.54.
Major indexes in Europe and Asia finished higher.
U.S. stocks have made a strong showing this year, with all major indexes posting gains of at least 10 per cent.
Investors seemed encouraged by reports that the U.S. and China could be making progress on critical negotiations aimed at resolving a trade war between the world's two biggest economies. China's congress endorsed an investment law that aims to address complaints from the U.S. and others that its system is rigged against foreign companies. The U.S. claims China forces companies to share technology in order to do business in the country.
Traders are also confident that the Federal Reserve will hold off on any action that could jeopardize economic growth. The central bank, which signalled in January that it was hitting pause on its rate hikes amid a slowdown in global growth and the absence of inflation pressures, is holding a meeting of policymakers next week.
Economists expect the Fed will keep rates on hold. Friday's surge in bond purchases also indicates that investors don't foresee the Fed raising interest rates any time soon.
"There's no chance of a rate hike," said Willie Delwiche, investment strategist at Baird.
Chipmakers made up six of the top 10 gainers in the S&P 500 Friday.
Broadcom led the technology sector rally after the chip provider reported a better-than-expected rise in fourth-quarter profit and told investors that it would return $12 billion to stockholders in 2019 through dividends and buybacks. The stock jumped 8.2 per cent.
CEO Hock E. Tan expects the chip business to hit a low in the second quarter and then notch growth during the second half of the year. That assessment helped give other chipmakers a lift. Intel added 1.7 per cent and Nvidia gained 2.6 per cent.
Health care, financial and consumer stocks also notched solid gains. Biogen added 2.6 per cent, Morgan Stanley rose 1.5 per cent, and Amazon gained 1.6 per cent.
Investors also bid up shares in Ulta Beauty after the cosmetics retailer's latest quarterly results topped Wall Street's forecasts. The stock jumped 8.3 per cent.
Facebook dropped 2.5 per cent on news that two of the social media company's longtime executives are resigning following the company's recent announcement that it will shift its emphasis to private messaging from public sharing.
Shares in Tesla skidded 5 per cent after the electric car maker unveiled its Model Y, a mid-size SUV that starts at $39,000. The unveiling comes as Tesla tries to expand into the mainstream and cash in on the red-hot market for SUVs.
Boeing shares recovered from an early slide to gain 1.5 per cent after a report suggested the aircraft manufacturer will roll out a software fix for its 737 Max airplanes later this month.
The stock has been hammered this week after a 737 Max flown by Ethiopian Airlines crashed Sunday in Ethiopia, killing all 157 people on board. A similar Boeing flown by Lion Air crashed in Indonesia in October, killing 189 people. The U.S. and other countries have since grounded the Boeing 737 Max 8.
Shares in Boeing fell 10.3 per cent this week. The stock is still up 14.9 per cent for the year.
The dollar fell to 111.48 Japanese yen from 111.73 yen on Thursday. The euro strengthened to $1.1320 from $1.1300.
The price of U.S. crude oil slipped 0.2 per cent to settle at $58.52 a barrel, while Brent crude dropped 0.1 per cent to close at $67.16 a barrel. Wholesale gasoline rose 0.4 per cent to $1.86 a gallon, heating oil slid 0.9 per cent to $1.97 a gallon and natural gas gave up 2.1 per cent to $2.80 per 1,000 cubic feet.
Gold rose 0.6 per cent to $1,302.90 an ounce, silver gained 1 per cent to $15.32 an ounce and copper added 0.5 per cent to $2.91 a pound.