NEW YORK: The Dow industrials have climbed for five of the past six trading days and risen 15% from a 52-week low hit on Feb. 11. The rally has been spurred by confidence in continued growth in the U.S. economy, a recovery in oil prices and the likelihood that U.S. interest rates will remain low.
Energy and materials shares advanced the most in the S&P 500 on Tuesday, as U.S. crude oil climbed $1.30, or 3.3%, to $41.08 a barrel. Analysts said prices got a boost from supply outages, including a strike by oil workers in Kuwait, which are expected to reduce production.
The Dow Jones Industrial Average climbed 49.44 points, or 0.3%, to 18053.60, a day after closing above 18000 for the first time since July. The S&P 500 rose 6.46 points, or 0.3%, to 2100.80, hitting 2100 for the first time this year.
Offshore oil driller Transocean climbed 93 cents, or 9.5%, to $10.68, while miner Freeport-McMoRan rose 99 cents, or 9%, to 12.01. The stocks were the S&P 500’s biggest gainers in percentage terms.
Goldman Sachs Group gained 3.63, or 2.3%, to 162.60, after the bank said its quarterly revenue fell 40% but still beat analyst expectations.
Better-than-feared results from banks have helped boost indexes in recent sessions. The KBW Nasdaq Bank Index of large U.S. commercial lenders is up 21% from a low hit in mid-February. The index still is down 6.4% this year, as banks have struggled with difficult trading conditions and low interest rates.
“You’ve got to temper short-term enthusiasm with a reality check,” said Bill Nichols, head of U.S. equities at Cantor Fitzgerald.
The technology sector fell the most in the S&P 500, dropping 0.7%. The tech-oriented Nasdaq Composite Index declined 19.69 points, or 0.4%, to 4940.33, and remains down 1.3% this year.
Chip maker Intel said it plans to cut up to 12,000 jobs as it reported first-quarter results, which included a worse-than-expected 7.2% increase in revenue. Shares fell in after-hours trading.
International Business Machines fell 8.53, or 5.6%, to 144, after the tech company late Monday reported a 4.6% slide in first-quarter revenue and a 13% decline in profit.
Netflix lost 14.06, or 13%, to 94.34, after the streaming-video service provided a disappointing forecast for its international business late Monday that heightened analysts’ concerns about slowing expansion in the U.S.
Some traders said now that the stock rebound has carried U.S. indexes to near records, further gains will require signs of growth in corporate earnings. “I see a lot of relieved asset managers, but I don’t see a lot of conviction,” said Tom Carter, managing director at brokerage JonesTrading. “It’s hard to imagine this thing going much higher without positive earnings growth.”
Traders at the New York Stock Exchange on Monday, when the Dow Jones Industrial Average closed above 18000 for the first time since July. ENLARGE
Traders at the New York Stock Exchange on Monday, when the Dow Jones Industrial Average closed above 18000 for the first time since July. PHOTO: EUROPEAN PRESSPHOTO AGENCY
Elsewhere, the Stoxx Europe 600 rose 1.5% following an upbeat session in Asia. Shares in Japan reversed Monday’s steep drops after concerns eased about the financial impact of recent earthquakes in Japan and as the yen has declined against the U.S. dollar over the past week. The Nikkei Stock Average ended 3.7% higher.
The dollar has dropped 9.2% against the yen this year, weighing on Japanese exporters and causing Bank of Japan Gov. Haruhiko Kuroda to hint at the possibility of further stimulus measures in a recent Wall Street Journal interview. Late Tuesday in New York, the dollar gained against the Japanese currency, buying ¥109.21, compared with ¥108.82 late Monday.
Kent Engelke, chief economic strategist at Capitol Securities Management, said he has recently sold some of his junk-bond holdings that had rallied since mid-February and used the proceeds to buy energy and value stocks.
“I thought we were going to rally, but I didn’t think we were going to hit 18000,” for the Dow, he said.
