Updated 1:10 pm, Thursday, February 15, 2018
Photo: Richard Drew, AP
NEW YORK (AP) — Technology companies are leading stocks higher Thursday, putting the market on track for its fifth gain in a row. A brief dip in the late morning put U.S. indexes into the red for a few minutes, but stocks soon rose again. Apple and Cisco were among the big winners in tech, while industrial companies including Boeing also rose. Energy company continued to struggle. The gains helped erase part of the steep losses the market suffered over the past two weeks.
KEEPING SCORE: The Standard & Poor’s 500 index rose 17 points, or 0.6 percent, to 2,715 as of 1 p.m. Eastern time. The Dow Jones industrial average rose 138 points, or 0.5 percent, to 25,000. In the early going it jumped as much as 226 points, then briefly dropped as much as 84 points.
The tech-heavy Nasdaq composite climbed 77 points, or 1.1 percent, to 7,219. Apple led the way after an analyst for Morgan Stanley said the iPhone X is gaining market share in China. It rose $4.53, or 2.7 percent, to $171.90.
The Russell 2000 index of smaller companies rose 6 points, or 0.4 percent, to 1,528.
Despite the gains over the past week, the S&P 500 is still 5.6 percent below the record high it set on Jan. 26. Trading volumes have returned to more typical levels this week. They spiked in the first two weeks of February as stock indexes took some wild swings.
EARN IT: Technology bellwether Cisco reported a bigger profit and better sales than analysts expected, and it also said it continued to win more subscriptions in its fiscal second quarter. Cisco also said it will buy back another $25 billion of its own stock. Cisco climbed $1.63, or 3.9 percent, to $43.72.
Travel website TripAdvisor gained $2.05, or 5 percent, to $42.77 after it also beat Wall Street estimates. The stock has surged 24 percent this year.
Animal health company Zoetis rose $2.39, or 3.2 percent, to $76.85 following its report, but data storage company NetApp lost $5.85, or 9.6 percent, to $54.79 as its forecasts for the current quarter disappointed investors.
HEAVY INDUSTRY: While the Federal reserve said U.S. factory output was unchanged in January, industrial companies rose again. Boeing jumped $8.12, or 2.4 percent, to $352.97 and aircraft maker United Technologies gained $2.97, or 2.4 percent, to $128.97. Honeywell picked up $1.96, or 1.3 percent, to $152.34.
BUFFET BETS ON TEVA: Warren Buffett’s Berkshire Hathaway disclosed an investment in struggling Teva Pharmaceutical Industries. It owned 18.9 million shares of the Israeli drugmaker at the end of last year. Teva said in December that it would eliminate one-fourth of its jobs as it deals with falling generic drug prices, the loss of patent protection on its multiple sclerosis drug Copaxone and $30 billion in debt from its acquisition of Allergan’s generics business. On Thursday the stock climbed $1.51, or 7.8 percent, to $20.84. Two years ago it was worth more than $55 a share.
ENERGY: U.S. crude oil turned higher in afternoon trading after a slump in the morning. Oil rose 64 cents, or 1.1 percent, to $61.25 a barrel in New York. Brent crude, used to price international oils, rose 5 cents to $64.41 a barrel in London.
Energy stocks were the only sector to decline in afternoon trading on Wall Street. They’ve done far worse than any other part of the market lately: of the 32 energy companies in the S&P 500, only four are currently higher than they were at the start of the year. Baker Hughes is down 18 percent while Exxon is down 9 percent and Chevron is down 11 percent.
WATCHING PRICES: U.S. wholesale prices rose 0.4 percent in January, the biggest increase since November. Rising prices can be a signal that inflation is increasing, but that didn’t concern investors very much on Thursday. The main reason for the increase in prices was a big jump in energy prices in January, but those numbers have dropped recently. U.S. crude oil peaked at $66 a barrel in late January and is trading around $60 a barrel now.
The recent slump in the stock market started after the Labor Department said workers’ pay climbed in January. Investors worried that that means inflation is gaining steam, and that the Federal Reserve will start raising interest rates faster than previously anticipated to keep that inflation in check. Those fears have eased somewhat over the last few days: investors had little reaction to Thursday’s price report, or to a report Wednesday that showed consumer prices rose in January.
BOUNCING BACK: Investors have been “buying on the dips” for years, and the moves over the last few days may look familiar. The last significant drop in the market prior to this month came in June 2016, after the United Kingdom voted to leave the European Union. The S&P 500 fell more than 5 percent in just two days, then gained it back almost as quickly.
BONDS: Bond prices rose. The yield on the 10-year Treasury note remained around four-year highs as it declined to 2.89 percent from 2.91 percent. That was its highest mark in four years.
CURRENCIES: The dollar slid to 106.68 yen from 107.09 yen. The euro rose to $1.2467 from $1.2435.
OVERSEAS: France’s CAC 40 climbed 1.1 percent as Airbus surged 7.6 percent after its latest quarter report. Germany’s DAX added 0.1 percent and Britain’s FTSE 100 rose 0.3 percent. Japan’s Nikkei 225 rose 1.5 percent and in Hong Kong the Hang Seng advanced 2 percent in a half-day trading session. Markets in mainland China, South Korea and Taiwan were closed for the lunar new year holiday.
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP . His work can be found at https://apnews.com/search/marley%20jayt .
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