Friday 23 February 2018

Wall Street stocks edge higher as three-day winning streak restores calm

The rebound over the last few days follows a harrowing drop of more than 10% over the previous two weeks.

Trader Edward Curran works on the floor of the New York Stock Exchange (AP Photo/Richard Drew)
Trader Edward Curran works on the floor of the New York Stock Exchange (AP Photo/Richard Drew)

By Marley Jay

Stocks on Wall Street rose for the third day in a row on Tuesday, led by banks, retailers and technology companies.

The rebound over the last few days follows a harrowing drop of more than 10% over the previous two weeks.

After a wobbly start, stocks started climbing in the early afternoon and wound up with their most placid day in the last few weeks.

Amazon climbed once again, and sportswear companies rose following solid fourth-quarter results from Under Armour.

Apple continued to recoup some of its recent losses. Energy companies slipped again, and companies that distribute prescription drugs and medical supplies slumped.

Stocks have been making big swerves higher and lower recently. Last week the Dow Jones industrial average twice fell 1,000 points in a day, sometimes gaining or losing hundreds of points in a few minutes.

But on Tuesday, the gap between the Dow’s highest mark and its lowest was a more modest 284 points.

Mark Hackett, chief of investment research at Nationwide Investment Management, said investors who have steered clear of the stock market started to pile in over the last few months, but that round of buying ended abruptly.

“The pattern that we saw over the last month and a half is not by any stretch of the imagination unusual,” he said.

“But it is compressed. It normally doesn’t happen over a six-week period.”

Mr Hackett said he feels stocks have fallen to more reasonable prices, partly because of the market slump and partly because corporate earnings grew at a strong clip in the fourth quarter.

The Standard & Poor’s 500 index rose 6.94 points, or 0.3%, to 2,662.94. The Dow added 39.18 points, or 0.2%, to 24,640.45.

The Nasdaq composite gained 31.55 points, or 0.5%, to 7,013.51. The Russell 2000 index of smaller-company stocks finished up 3.97 points, or 0.3%, at 1,494.95.

On Wednesday the US labour department will issue its monthly report on consumer prices. Investors will be watching carefully because the recent bout of market volatility was touched off by worries that inflation might be increasing.

Under Armour climbed after it reported better-than-expected sales as shoe and accessory revenue picked up.

The stock had plunged 50% in 2017 on top of a 30% decline in 2016. It rose 2.47 dollars, or 17.2%, to 16.70 dollars. Sportswear retailer Foot Locker also gained ground.

Amazon climbed 28.28 dollars, or 2%, to 1,414.51 dollars, and department stores and clothing companies made gains as well.

Prescription drug distributor AmerisourceBergen jumped 8.32 dollars, or 9.3%, to 97.77 dollars after The Wall Street Journal reported that Walgreens Boots Alliance wants to buy the rest of the company.

It already owns 26% of AmerisourceBergen, one of the largest prescription drug distributors in the US.

It also distributes products to hospitals and other health systems. The Wall Street Journal said Walgreens made an approach several weeks ago that no offer has been made. Walgreens lost 17 cents to 68.29 dollars.

Separately, the Journal reported that Amazon is looking to win over hospitals and clinics to distribute a variety of medical products.

In January Amazon announced a partnership with JPMorgan Chase and Berkshire Hathaway aimed at reducing healthcare costs. It is widely believed to have designs on a larger role in the healthcare system.

Nutrition supplement company GNC Holdings soared 18% after it formed a joint venture with Harbin Pharmaceutical Group of China.

Harbin is investing 300 million dollars in GNC, which will make it the company’s largest shareholder. The stock rose 76 cents to 4.96 dollars.

Germany’s DAX shed 0.7% and the CAC 40 of France fell 0.6%. Britain’s FTSE 100 lost 0.1%.

Japan’s Nikkei 225 lost 0.7% and Hong Kong’s Hang Seng index added 1.4%. South Korea’s Kospi rose 1.1%.

Press Association

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