Market Report

Tech companies lead stock rally

Trader Patrick Casey, center, works on the floor of the New York Stock Exchange, Thursday, July 12, 2018. Stocks are opening higher as technology companies rally. (AP Photo/Richard Drew)
Trader Patrick Casey, center, works on the floor of the New York Stock Exchange, Thursday, July 12, 2018. Stocks are opening higher as technology companies rally. (AP Photo/Richard Drew)

NEW YORK -- Technology companies soared Thursday as major U.S. stock indexes recovered the ground they lost a day earlier. The Nasdaq composite closed at another all-time high.

Big names like Apple and Microsoft, and chipmakers, including Intel, all made big gains as investors remain optimistic about the technology sector even though much of the market has been shaken by escalating tensions between the U.S. and its trading partners, especially China.

The S&P 500 index rose 24.27 points, or 0.9 percent, to 2,798.29. The Dow Jones industrial average rose 224.44 points, or 0.9 percent, to 24,924.89.

The Nasdaq jumped 107.30 points, or 1.4 percent, to 7,823.92. Its last record came on June 20.

The Russell 2000 index of smaller-company stocks added 6.61 points, or 0.4 percent, to 1,690.28.

Banks will begin reporting their second-quarter results this morning. Investors expect another round of strong profit growth for the whole market, but they're especially optimistic about technology companies. They will announce their earnings later this month.

"Tech has been there for them through all of these ups and downs," said Karyn Cavanaugh, senior markets strategist at Voya Investment Management. "They're a good wingman for investors, and that's why investors are sticking with them."

Industrial companies also regained much of the ground they lost Wednesday, but energy companies and basic materials makers failed to rally. Defense contractors climbed after President Donald Trump advocated for more defense spending in the U.S. and Europe.

Several European leaders said NATO spending plans haven't changed.

Software maker CA made the biggest gain in the technology sector after it accepted an offer from Broadcom worth $18.9 billion, or $44.50 per share. Its stock rocketed 18.7 percent to $44.15. Broadcom investors expressed their disapproval of the deal, which involves Broadcom taking on $18 billion in debt. The stock dropped 13.7 percent to $209.98.

Broadcom's market value fell by $14.4 billion.

The merry-go-round of potential media deals continued as Comcast offered to buy European pay-TV company Sky for $34 billion a day after Twenty-First Century Fox increased its own offer for Sky.

Fox already owns part of Sky, and while it tangles with Comcast, Comcast and Disney are also trying to buy Fox itself. Fox recently accepted Disney's $71 billion offer. The New York Times reported Thursday that Comcast will focus on Sky and end its pursuit of Fox.

Sky's stock rose 3.4 percent in London. In the U.S., Comcast rose 2.3 percent to $34.55 and Fox fell 0.9 percent to $47.38. Disney gained 0.2 percent to $108.25.

CVS Health rose 1 percent to $67.99 and Aetna gained 1.9 percent to $191.09 after Bloomberg News reported that the Department of Justice won't try to stop CVS from buying Aetna. AT&T fell 1.3 percent in after-hours trading after the Justice Department appealed a court ruling that allowed AT&T to buy Time Warner.

Stocks around the world slumped Wednesday after the Trump administration released a list of $200 billion in imports from China that it could hit with a 10 percent tax. China said it would retaliate if the tariffs take effect, and the dispute could impair global economic growth.

Stocks overseas took bigger losses than U.S. indexes did and they made smaller recoveries Thursday. In Paris, the French CAC 40 climbed 1 percent. Germany's DAX added 0.6 percent, and the Britain FTSE 100 rose 0.8 percent.

Benchmark U.S. crude dipped 0.1 percent to $70.33 a barrel in New York while Brent crude, used to price international oils, rose 1.4 percent to $74.45 per barrel in London.

U.S. crude dropped 5 percent Wednesday and Brent nose-dived almost 7 percent as investors worried that the trade conflict will hurt the global economy. They also expect oil supplies to increase after Libya announced that it will start exporting oil again.

Business on 07/13/2018

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