Stocks Rise on Wall Street, Sending Dow Briefly Over 27,000
NEW YORK (AP) – Technology and communications companies pushed stocks higher on Wall Street in early trading Thursday, extending the market’s gains from the day before.
The early buying briefly nudged the Dow Jones Industrial Average above the 27,000 point mark for the first time, a day after the S&P 500 made its first move above 3,000.
The market shook off a two-day slide earlier this week and has been trending higher as investors have grown more confident that the Federal Reserve may cut interest rates for the first time in a decade as soon as the end of this month.
On Wednesday, Fed Chairman Jerome Powell said that many Fed officials believe a weakening global economy and rising trade tensions have strengthened the case for a rate cut. The remarks came as Powell gave testimony before the House Financial Services Committee. He was due to appear before the Senate Banking Committee Thursday morning, though his testimony is not expected to have as much of an impact on Wall Street.
The market rallied through much of June after the central bank first signaled that it’s prepared to cut rates to offset slowing global growth and the fallout from U.S. trade conflicts.
Chipmaker Nvidia was among the big gainers in the technology sector in early trading Thursday. The stock climbed 2.3%. CenturyLink led the gainers in the communications sector, rising 1.3%.
Banks also helped lift the market. They got a boost from a pickup in the yield on the 10-year Treasury note, which rose to 2.08% from 2.06% late Wednesday. When bond yields rise, they push interest rates on mortgages and other loans higher, making them more profitable for lenders. Goldman Sachs Group gained 0.9%.
Energy stocks were the biggest laggard. Cimarex Energy dropped 1%. Real estate and materials stocks also fell.
KEEPING SCORE: The S&P 500 rose 0.1% as of 10:12 p.m. Eastern Time. The Dow gained 103 points, or 0.4%, to 26,965. The Nasdaq composite gave up an early gain, dipping by less than 0.1%. European and Asian markets were broadly higher.
CONSUMER PRICES: The Labor Department said Thursday that the consumer price index increased 1.6% in June from a year earlier. That is down from 1.8% in May and the second straight drop. It rose 2.1% from a year ago.
Inflation has been muted throughout the 10-year expansion, now the longest on record, even as the unemployment rate has dropped to a very low 3.7%. Federal Reserve Chairman Jerome Powell cited persistently low inflation on Wednesday as a justification for potentially lowering short-term interest rates at the Fed’s next meeting in late July.
TRADE TENSIONS: Retaliatory tariffs remain a worry for markets.
While China-U.S. trade tensions have calmed with a resumption of talks by phone between top envoys, friction with France looms after President Donald Trump’s administration launched an investigation into French plans for a special tax targeting big tech companies.
HIGH FLYER: Delta Air Lines climbed 1.6% after it reported that its second-quarter profit jumped 39%, beating Wall Street’s forecasts.
LOSING ITS GRIP: Fastenal slid 5.3% after the company’s latest quarterly results fell short of Wall Street’s expectations.
By AP reporter Alex Veiga