U.S. stocks rebound as tech shares get back their mojo
U.S. stocks bounced back to record highs Tuesday as investors put an end to a two-day drop for technology companies. Energy and consumer-focused companies also made outsize gains.
In a reversal from the two previous trading days, investors put money into companies that stand to benefit from faster economic growth, including retailers, makers of basic materials like paints and chemicals, energy companies and banks. Big-dividend companies, which are usually considered safer investments, did not do as well as the rest of the market.
Tech companies reversed their losses from Monday, although they remain well below their peak from last week.
"There's no question that the rally in that sector can continue as long as investors' sentiment remains positive," said Brian Rehling, co-head of global fixed income strategy at Wells Fargo Investment Institute. Rehling said he believes tech stocks are a bit too high, but not by a huge amount.
The Standard & Poor's 500 index picked up 10.96 points, or 0.5 percent, to close at 2,440. The Dow Jones industrial average rose 92.80 points, or 0.4 percent, to 21,328.
The Nasdaq composite, which has a large concentration of technology companies, rose 44.9 points, or 0.7 percent, to 6,220, but did not get back to its record highs. The Russell 2000 index of smaller-company stocks added 6.77 points, or 0.5 percent, to 1,426.
Technology companies led the way once again. Facebook (FB) rose $2.24, or 1.5 percent, to $150.68 while Microsoft (MSFT) gained 87 cents, or 1.2 percent, to $70.65. Even after their recent skid, technology companies have done much better than the rest of the market in 2017.
Energy companies joined the gains as the price of oil reversed an early loss. U.S. crude futures added 38 cents to settle at $46.46 a barrel in New York. Brent crude, used to price international oils, picked up 43 cents to $48.72 a barrel in London.
Among energy stocks, Halliburton (HAL) climbed 92 cents, or 2 percent, to $45.84 and oil refiner Tesoro (TSO) rose $3.03, or 3.3 percent, to $94.22.
Wholesale gasoline rose 1 cent to $1.50 a gallon. Heating oil finished up 2 cents at $1.45 a gallon. Natural gas slumped 6 cents, or 1.9 percent, to $2.97 per 1,000 cubic feet.
The Federal Reserve began a two-day policy meeting on Tuesday. On Wednesday, investors expect the central bank to raise interest rates for the fourth time since December 2015. Rehling, of the Wells Fargo Investment Institute, said investors will scrutinize the Fed's views on inflation and how aggressive it will be in raising interest rates in the future.
"The market's going to be looking to see if they're still on track," he said. Rehling added that investors also want to know about the Fed's plan to start reducing its huge portfolio of bonds. He doesn't think that will have much effect on the bond market.