Stocks Shrug Off an Early Slide and Turn Higher, Led by Tech
NEW YORK (AP) — Stocks shook off an early slump and turned higher in morning trading Wednesday, led by solid gains in Microsoft, Facebook and Google.
Banks were still lower following a steep drop in bond yields. Bond yields fell after some surprisingly disappointing economic data in the U.S. including weak figures on retail sales and industrial production. Macy's rose after turning in solid quarterly results.
The early flip-flop marked the latest reversal for a stock market that has been whipsawed by worries over the worsening trade relationship between China and the U.S. and the fallout it may have on the broader global economy. The market plunged Monday, bounced back Tuesday and see-sawed in early trading Wednesday.
Weak signals on economic growth drove investors to push bond yields sharply lower. The yield on the 10-year Treasury note, which is used to set rates on many kinds of loans including mortgages, fell to 2.38% from 2.42% late Tuesday.
That drop in yields particularly hurts banks because it cuts into profit from interest on loans. Bank of America fell 1.2% and JPMorgan Chase fell 0.7%.
Technology stocks were mixed. Microsoft rose 1.3%, but chipmakers, which are heavily dependent on China for sales, remained weak. Nvidia fell 1.4%.
Safe-play stocks held up well. Real estate companies and makers of consumer products rose. PepsiCo rose 1%.
Analysts have been warning that the stock market will remain volatile as long as the U.S. and China remain locked in their latest spat. The latest flare-up began early this week when President Donald Trump decided to raise more tariffs on Chinese goods. China responded with plans for its own increased tariffs on U.S. goods.
The escalation surprised investors who had been expecting a resolution. That confidence was a key component of the stock market's sharp gains so far this year.
KEEPING SCORE: The S&P 500 index rose 0.3% as of 10:40 a.m. The Dow Jones Industrial Average edged up 20 points, or 0.1%, to 25,551. The Nasdaq rose 0.7%
POSITIVE FLOW: Progressive rose 3.7% after it gave investors a solid first quarter earnings report and renewed its stock buyback plan. The insurance company reported a sharp rise in written premiums.
RECALIBRATING: Agilent plunged 9% after cutting its revenue forecast for the year following a disappointing first quarter. The scientific instruments maker reported first quarter profit and revenue that fell short of Wall Street forecasts.
SHOPPING FOR PROFIT: Alibaba Group Holding rose 1.2% after the online retailer blew past Wall Street forecasts for first quarter profit. The Hong Kong-based company also beat revenue forecasts for the quarter.
MACY'S: Macy's rose 0.8% after reporting its sixth consecutive quarter of increases in comparable store sales. That is a key measure of a retailer's health. The department store chain also blew past first quarter profit forecasts and reported higher online sales growth.
By AP reporter Damian J. Troise