Solid earnings lift Wall Street stocks to new records - Los Angeles Times
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Solid earnings lift Wall Street stocks to new records

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The Standard & Poor’s 500 and Nasdaq composite indexes have set all-time closing highs every day this week.
(Mary Altaffer / Associated Press)
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Stocks on Wall Street closed broadly higher Wednesday, driving the three main U.S. indexes to more record highs.

Technology stocks powered much of the rally as investors focused on a batch of mostly solid company earnings reports, and worries about the economic effect of the coronavirus outbreak that originated in China continued to subside.

Health officials raised hopes that the spread of the virus is peaking after the number of new cases dropped for a second straight day. Worries about the economic effect of the outbreak fueled a wave of selling that erased the market’s gains in January, but traders have since largely set aside their jitters.

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The Standard & Poor’s 500 index is up 4.8% so far this month, on pace for its biggest monthly gain since June. On Wednesday it rose 21.70 points, or 0.6%, to 3,379.45. The Nasdaq climbed 87.02 points, or 0.9%, to 9,725.96. Both indexes have set all-time closing highs every day this week.

The Dow Jones industrial average rose 275.08 points, or 0.9%, to a new record of 29,551.42. The Russell 2000 index of smaller-company stocks ticked up 11.86 points, or 0.7%, to 1,689.38.

Bond prices fell. The yield on the 10-year Treasury rose to 1.63% from 1.59%.

Stronger-than-expected company earnings reports and positive U.S. economic data have helped keep investors in a buying mood. Traders are also betting that central banks and governments around the world will support markets with interest-rate cuts and stimulus to stem any potential economic fallout from the virus outbreak.

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Investors got some encouraging news Wednesday when health officials reported that the number of new cases of the coronavirus in China declined for a second straight day. The outbreak has infected more than 45,000 people worldwide and killed more than 1,100.

Meanwhile, Chinese President Xi Jinping promised tax cuts and other aid to industry as the ruling Communist Party tries to limit the mounting damage to the economy.

Stocks of companies focusing on travel made some of the strongest gains Wednesday. United Airlines rose 2.1%, and Wynn Resorts and Royal Caribbean Cruises each climbed 3.7%. Travel-related businesses such as cruise lines and hotels have been more sensitive than other companies to the spread of the virus.

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Technology stocks led the broader market’s gains. Micron Technology climbed 3.5%. Apple rose 2.4%.

Companies that rely on consumer spending also did well. Nike gained 3%. Gap jumped 4.7%.

Communication services stocks notched solid gains. Twitter advanced 3.2%. Video-game developer Activision Blizzard rose 2.6%.

The price of crude oil jumped 2.5%, which gave energy companies a boost. Hess led the gainers, climbing 4.7%. The energy sector remains the market’s worst performer this year: It’s down 9.1%.

The pickup in bond yields weighed on several home builders, including Toll Brothers, which slid 1.6%. Mortgage rates tend to track the 10-year Treasury yield, so a rise in the yield means less attractive rates.

Utilities and makers of household goods lagged behind the broader market, another sign that investors were more confident and shifting money into investments that carry more risk.

Investors continued to assess company earnings reports.

Akamai Technologies rose 1.1% after the cloud services provider beat analysts’ profit and revenue forecasts. Generic drug developer Teva jumped 9.1% and e-commerce company Shopify vaulted 7.8% after reporting solid financial results.

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Lyft plunged 10.2% after the ride-hailing company stuck to a prediction that it won’t turn a profit until the fourth quarter of 2021. By contrast, rival Uber said this month that it would make money in the fourth quarter of this year.

Benchmark crude oil rose $1.23 to $51.17 a barrel. Brent crude oil, the international standard, rose $1.78 to $55.79 a barrel. Wholesale gasoline rose 7 cents to $1.58 a gallon. Heating oil climbed 5 cents to $1.68 a gallon. Natural gas rose 5 cents to $1.84 per 1,000 cubic feet.

Gold rose $1.80 to $1,567.40 an ounce. Silver fell 9 cents to $17.48 an ounce. Copper rose 2 cents to $2.61 a pound.

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