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US stocks approach record as technology, energy stocks gain
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U.S. stocks climbed back close to record levels on Thursday as technology, materials and energy companies all notched big gains.
Cisco Systems led the technology sector higher after reporting better-than-expected earnings. Energy stocks rose as the price of oil rebounded following two days of heavy losses.
There were also big gains for online travel companies. Expedia and Orbitz jumped after Expedia said that it was acquiring its rival. TripAdvisor also surged on speculation that the wave of consolidation in the industry would continue.
Stocks have logged big gains in February after a slumping to their worst month in a year in January on worries about the outlook for the global economy. Reports this month have shown that company earnings are still growing and the U.S. economy appears to be maintaining its recovery as hiring picks up.
"People were getting a little bit overly pessimistic," said Karyn Cavanaugh, a senior market strategist at Voya Investment Management. "I still think we're going to see a pretty decent year for the market."
The Standard & Poor's 500 index climbed 19.95 points, or 1 percent, to 2,088.48. The index is within two points of its record close of 2,090.57, set Dec. 29.
The Dow Jones industrial average gained 110.24 points, or 0.6 percent, to 17,972. The Nasdaq composite climbed 56.43 points, or 1.2 percent, to 4,857.61.
On Tuesday, stocks opened higher on encouraging news from Europe, where world leaders clinched a cease-fire deal for Ukraine and as investors remained hopeful that Greece would be able to reach an agreement with its creditors.
An emergency meeting Wednesday between Greece's new government and finance ministers from nations that use the euro ended in a stalemate. Greece wants its creditors to ease the terms of a bailout program that has imposed years of austerity on the country.
Despite the setback, investors are hopeful that a deal will be reached before the country's financial rescue program expires at the end of the month. The main Athens stock index jumped 6.7 percent.
In the U.S., TripAdvisor was the biggest gainer in the S&P 500, surging $15.13, or 23 percent, to $82.40, after the announcement of Expedia's bid for Orbitz.
Cisco, a major maker of computer networking equipment, was another big gainer. The stock jumped $2.53, or 9.4 percent, to $29.46 after it reported earnings late Wednesday that exceeded analysts' expectations. The company's outlook for the full year was also better than expected.
The S&P 500 index is up 4.7 percent for the month. If the market closes out the month at this level, it will be the best performance for the index since July 2013.
Still, not all investors are convinced that the prices of stocks will keep going up this year.
Katrina Lamb, head of investment strategy and research at asset manager MV Financial, says that the most likely path for the market is sideways. Concerns about the potential impact of higher rates in the U.S. and the outlook for overseas growth will likely keep the stock market in check.
"I don't really see much of a breakout potential (for stocks) in either direction," said Lamb. "It's going to be more of muddling along."
On Thursday, American Express was among the day's losers after the company said that it failed to reach an agreement to renew and exclusivity deal with Costco. The current agreement covers U.S. stores and dates back 16 years. It will end March 31, 2016.
Amex slumped $5.53, or 6.4 percent, to $80.48.
In energy trading, the price of oil rose sharply as the CEO of Royal Dutch Shell said he expects crude demand will grow faster than supply this year. Benchmark U.S. crude rose $2.37 to close at $51.21 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, rose $2.39 to close at $57.05 in London.
Oil has recovered since falling 60 percent in the past seven months. It fell as low as $45 a barrel at the end of January. The rebound is encouraging to investors who had worried that the slump was signal of a slowing global economy.
In U.S. government bond trading, prices rose slightly. The yield on the benchmark 10-year Treasury note edged down to 1.97 percent from 1.99 percent on Wednesday.
The dollar fell to 119 yen from 120.16 yen the previous day. The euro rose to $1.1406 from $1.1319.
In metals trading, gold rose $1.10 to $1,220.70 an ounce, silver rose three cents to $16.79 an ounce and copper rose five cents to $2.60 a pound.
In other energy trading, In other futures trading on the NYMEX:
' Wholesale gasoline rose 5.3 cents to close at $1.596 a gallon.
' Heating oil rose 10 cents to close at $1.914 a gallon.
' Natural gas fell 8.4 cents to close at $2.713 per 1,000 cubic feet. (***)
