Stocks ring in 2018 with gains as technology leads again
NEW YORK (AP) Technology and health care companies jumped Tuesday as U.S. stocks started the new year the same way they spent the last one: rising steadily and setting records. Energy companies, which struggled in 2017, also climbed.
Asian markets rose after surveys in China and India showed continued manufacturing growth in the world's most populous countries. U.S. stocks followed suit as investors snapped up shares of companies that should benefit from faster economic growth, including technology, health care and materials companies, just as they did last year. The Nasdaq composite busted through another milestone as it closed above 7,000 points.
"We'll continue to see many of the themes from last year play out," said Kate Warne, an investment strategist for Edward Jones.
She said the global economy should keep growing and businesses and consumers around the world will continue to spend more money. It helps that interest rates are low, and governments in areas that reduced their spending during the Great Recession are becoming more willing to spend.
The Standard & Poor's 500 index rose 22.20 points, or 0.8 percent, to a record 2,695.81. The Dow Jones industrial average climbed 104.79 points, or 0.4 percent, to 24,824.01. The Nasdaq composite jumped 103.51 points, or 1.5 percent, to 7,006.90. The Russell 2000 index, which consists of smaller company stocks, gained 14.50 points, or 0.9 percent, to 1,550.51, also a new high.
The Nasdaq had its best opening day since 2013 as the big technology companies that dominated in 2017 got the new year off to a good start. Facebook rose $4.96, or 2.8 percent, to $181.42 and Apple climbed $3.03, or 1.8 percent, to $172.26. Chipmaker Nvidia climbed $5.85, or 3 percent, to $199.35.
Health care sector
Drug and medical device companies led the health care sector higher. Hepatitis C and HIV drug maker Gilead Sciences gained $2.46, or 3.4 percent, to $74.10. Abbott Laboratories, which sells medications, infant formula and medical devices, picked up $1.72, or 3 percent, to $58.79 and Baxter International gained $2.53, or 3.9 percent, to $67.17.
Retailers also rose. That included Amazon, which added $19.54, or 1.7 percent, to $1,189.01. Retailers that struggled last year, including big box and department stores, also fared well. Target rose $2.38, or 3.9 percent, to $67.63 while Kohl's picked up $2.12, or 3.9 percent, to $56.35. Early indications suggest shoppers had a busy holiday season and investors will look for confirmation of those reports in the weeks to come.
Bond prices slid. The yield on the 10-year Treasury note rose to 2.46 percent from 2.41 percent. The yield on 2-year note rose to 1.92 percent from 1.89 percent.
The increase in bond yields sent high-dividend stocks like utilities, household goods makers and real estate companies lower. Higher bond yields make those stocks less appealing to investors seeking income.
Investors bet that the markets will stay calm, too. The VIX, a measurement of how much volatility investors expect, moved sharply lower. It's been at historic lows since April.
Weight Watchers International climbed after it struck a deal with producer and recording artist DJ Khaled, who will represent the brand to millions of followers on Snapchat, Twitter, Instagram and Facebook. Weight Watchers got a big boost a few years ago from a deal with Oprah Winfrey that also included a substantial investment in the company. Its stock added $3.55, or 8 percent, to $47.83.
Bitcoin rose after the Wall Street Journal reported that the venture capital firm Founders Fund, co-founded by Peter Thiel, bought around $15 million in bitcoin in mid-2017. The report cited anonymous sources. The digital currency rose 11.1 percent to $14,901, according to Coindesk. Thiel did not immediately respond to request for comment.