Led by technology and health care, stocks set more records
NEW YORK (AP) — The market’s biggest winners this year, technology and health care, powered U.S. stock indexes to more all-time highs on Tuesday.
Huge technology companies like Apple and Facebook continued their ascent, while strong reports from companies including medical device maker Medtronic and construction and technical services company Jacobs Engineering helped health care and industrial companies, respectively.
Basic materials companies, which have done better than the rest of the Standard & Poor’s 500 index, also rose. Telecommunications companies declined, while energy companies and banks didn’t do as well as the rest of the market.
Apple, Facebook, Alphabet, Microsoft and Amazon, the five most valuable companies on the stock market, all rose more than 1 percent, and they’ve all had a very strong year. JJ Kinahan, chief market strategist at TD Ameritrade, said that’s not about to stop.
“They’re seeing better earnings, better sales, better growth,” he said. “It’s difficult to argue with that.”
The S&P 500 index climbed 16.89 points, or 0.7 percent, to 2,599.03. The Dow Jones industrial average gained 160.50 points, or 0.7 percent, to 23,590.83. The Nasdaq composite added 71.76 points, or 1.1 percent, to 6,862.48.
The Russell 2000 index of smaller-company stocks rose for a fourth day and picked up 15.49 points, or 1 percent, to 1,518.89. All four indexes set records. The Russell had struggled in recent weeks, but on Tuesday it beat its record close from early October.
Big-name technology companies lead the way overall. Apple rose $3.16, or 1.9 percent, to $173.14 and Facebook added $3.12, or 1.7 percent, to $181.86. Health care companies climbed as well. Those two sectors are the best-performing parts of the market this year.
Homebuilders climbed after the National Association of Realtors said sales of homes grew in October. They’re down slightly from last year because there are so few houses on the market, but the tight supply and rising prices have sent homebuilder stocks soaring this year. On Tuesday, NVR advanced $59.69, or 1.8 percent, to $3,377, while D.R. Horton gained $1.15, or 2.4 percent, to $49.35.
Along with those reports, investors were cheered by projections from Goldman Sachs analyst David Kostin, who forecast that the S&P 500 will rise 14 percent in 2018 if corporate taxes are cut. Kostin, who didn’t think stocks would rise that much this year, now says the bull market could last three more years, with continued economic growth and lower taxes taking the S&P 500 to 3,100 by the end of 2020.
Kinahan, of TD Ameritrade, said the potential tax cuts might help stocks in another way: usually, investors might sell some of their holdings after a better-than-expected year like this one. But right now, they’re not sure what their taxes will look like in 2018.
“People may not be taking profits as aggressively at the end of this year as they would in a normal year because they’re not sure where the tax plan will come out,” he said.
Medtronic jumped after it posted profit that was larger than analysts had expected. The company said sales of heart devices including newer devices like its CoreValve Evolut Pro heart valve, drove its sales higher in the fiscal second quarter. The stock rose $3.76, or 4.8 percent, to $82.66.
Signet Jewelers plunged $23.05, or 30.4 percent, to $52.79 after the company slashed its annual forecast. The company recently sold its highest-quality loans to Alliance Data Systems, but the company said “disruptions” related to that move have affected sales, especially for its Kay brand.
Alliance Data Systems fell 83 cents to $223.84. Aaron’s, which is running a lease-payment program for other Signet customers, fell 54 cents, or 1.5 percent, to $36.20.