NEW YORK: A rally in health-care shares helped U.S. stocks edge higher on Thursday.
Some investors were wary of making big moves ahead of coming events, including Friday’s jobs report, which could offer hints about the pace of interest-rate increases, and the vote on the U.K.’s membership in the European Union later this month.
“We remain in a fragile, low-growth environment, so I think a lot of people are content to sit on the sidelines a bit and wait for more certainty,” said Chris Dyer, director of global equity at Eaton Vance.
The Dow Jones Industrial Average rose 48.89 points, or 0.3% to 17838.56. The S&P 500 gained 5.93 points, or 0.3%, to 2105.26 and the Nasdaq Composite Index gained 19.11 points, or 0.4%, to 4971.36.
Health-care stocks gained the most in the S&P 500, rising 1.3% to erase their 2016 loss. The sector is now up 0.4% for the year. Aetna filed documents for a bond offering to fund its acquisition of Humana, a signal the company believes the deal is on track. Humana rose $9.96, or 5.6%, to $187.36, and Aetna gained 4.74, or 4.1%, to 120.03. Aetna later sold $13 billion of bonds for the $34 billion acquisition.
Johnson & Johnson rose 1.71, or 1.5%, to 114.49 after the company said it would acquire hair-products company Vogue International, and UnitedHealth Group climbed 1.51, or 1.1%, to 136.04. That placed them among the biggest gainers in the Dow industrials.
Peter Stournaras, portfolio manager of the BlackRock Large Cap Series Funds, said prices of health-care companies have grown increasingly attractive after the sector underperformed the broader market for much of the year.
Energy stocks in the S&P 500 slipped 0.3%, after the Organization of the Petroleum Exporting Countries broke off its meeting without any new agreements on oil production. Diamond Offshore Drilling fell 1.01, or 4%, to 24.30.
U.S. crude-oil prices rose 0.3% to $49.17 a barrel. Exxon Mobil fell 71 cents, or 0.8%, to 88.53 and Chevron lost 60 cents, or 0.6%, to 100.53.
Energy stocks in the S&P 500 are up more than 10% this year, making the sector one of the index’s best performers even though there has been little fundamental improvement among energy firms, said Omar Aguilar, chief investment officer of equities and multiasset strategies at Charles Schwab Investment Management.
“It’s clearly remarkable that you see energy being where it is, given the lack of global growth and the challenges for energy companies in terms of capital spending,” he said.
U.S. government-bond prices strengthened as oil prices fell. The yield on the benchmark 10-year Treasury note was 1.811%, compared with 1.844% Wednesday. Yields fall when bond prices rise.
