Banks, AT&T Nudge US Stocks Broadly Higher in Early Trading
NEW YORK (AP) — U.S. stocks edged higher in early trading Monday as rising bond yields lifted banks and AT&T powered gains in the communications sector.
AT&T soared in heavy trading after activist investor Elliott Management announced a $3.2 billion stake in the company and called for a shakeup. The communications company did much of the heavy lifting for the sector. Netflix and Google also made big gains.
JPMorgan Chase rose 1.3% and Bank of America rose 1.7% as bond yields jumped. Banks rely on higher yields to set more lucrative interest rates on loans.
The yield on the 10-year Treasury rose to 1.61% from 1.55% late Friday in a sign that investors remain confident that the economy will continue growing. They also shifted money out of safe-play sectors like utilities and makers of consumer products.
Health care stocks were the biggest losers in the early going, dragged down by drug developers Merck and Amgen.
The broader market is coming off of two weeks of gains following a bout of volatility brought on by the trade war between the U.S. and China. Investors are still hoping for some kind of a deal between the two nations, and were encouraged last week by news that talks will resume in October.
A mixed bag of economic data has kept Wall Street focused on central banks and whether they will continue taking measures to shore up economic growth. On Friday, Federal Reserve Chairman Jerome Powell said the central bank doesn’t expect a recession and will take necessary actions to maintain growth. Economists expect the Fed to cut interest rates when it meets next week.
KEEPING SCORE: The S&P 500 rose 0.2% as of 10:25 a.m. Eastern time. The Dow Jones Industrial Average rose 88 points, or 0.3%, to 26,887. The Nasdaq was little changed. Small-company stocks did better than the rest of the market. The Russell 2000 rose 0.5%.
OVERSEAS: Stocks in Europe were mixed as economic growth concerns and Britain’s potentially chaotic exit from the European Union weigh on investors. The European Central Bank is expected to unveil new monetary stimulus measures on Thursday to help shore up economic growth.
Stocks in Asia were broadly higher. The Shanghai Composite rose 0.8% as investors brushed off the latest trade data showing a drop in imports from and exports to the U.S. amid a damaging trade war.
CALLING FOR CHANGE: AT&T jumped 4.4% after investment manager Elliott Management increased its stake in the communications company while urging it to shed businesses and trim costs.
By AP reporter Damian J. Troise