Stocks move higher on Wall Street; Sonic gains
By STEVE ROTHWELL
the associated press | March 26,2014
Trader Peter Tuchman, left, works on the floor of the New York Stock Exchange Tuesday. Stocks are opening higher on Wall Street as the market shrugs off a two-day decline.
NEW YORK — Stocks got a lift Tuesday as health care companies bounced back after a heavy sell-off.
Biotechnology stocks in the Standard & Poor’s 500 index rose for the first time in five days after a sharp sell-off that prompted by concern over costs of the drugs they make. Merck and Boston Scientific were among the companies that rose.
Stocks have been flipping between gains and losses for the most of the month, as investors have bought stocks after every dip. While many investors are confident that economic growth will accelerate as the weather moderates following an unusually harsh winter, they are reluctant to push stock prices higher before seeing more evidence that the economy is picking up.
“The reasons to buy are certainly there,” said Robert Pavlik, chief market strategist at Banyan Partners, a wealth management company. “People are afraid to jump the gun.”
The S&P 500 rose 8.18 points, or 0.4 percent, to 1,865.62. The Dow Jones industrial average gained 91.19 points, or 0.6 percent, to 16,367.88. The Nasdaq composite gained 7.88 points, or 0.2 percent, to 4,234.27.
Nine of the 10 industry groups in the S&P 500 ended the day higher. Industrial stocks rose the most, 0.9 percent, followed by the energy and health care sectors, which each gained 0.8 percent.
Biotechnology companies in the index rose 0.6 percent, led by Alexion Pharmaceuticals, which rose $3.32, or 2.2 percent, to $153. The index had lost 8.5 percent over the previous four days. The index has surged in the last year and is still up 45 percent over the last 12 months.
McCormick was the best performing stock in the S&P 500 on Tuesday. The company, which makes spices, seasonings and condiments, rose $3.69, or 5.5 percent, to $71.20 after reporting earnings that beat analysts’ estimates. The company also reaffirmed its outlook for the year.
Another big gainer was Sonic. The stock of the drive-in restaurant company jumped $2.31, or 11 percent, to $23.23 after the company posted earnings that exceeded the expectations of Wall Street analysts. Net income rose despite the unusually harsh winter weather.
There were also conflicting reports on the economy for investors to consider.
One report showed that fewer people bought new U.S. homes in February. Sales fell to the slowest pace in five months, a sign that the housing market has yet to recover fully from brutal winter weather, the Commerce Department said Tuesday. Meanwhile, an index measuring U.S. consumer confidence rose to the highest level in six years, another sign that the economy’s prospects should brighten with warmer weather.
Mixed signals have undermined investor’s confidence in the economy after a strong fourth quarter last year suggested that U.S. growth was poised to accelerate, said Russ Koesterich, chief investment strategist for BlackRock. The S&P 500 has gained 0.3 percent this month, and is up 0.9 percent for the year.
“The investment thesis for 2014 was that the U.S. economy was going to start sprinting ahead,” said Koesterich. “It’s been a very sluggish start to the year ... People are not seeing the growth that they expected.”
Prices for U.S. government bonds fell. The yield on the 10-year U.S. Treasury note rose to 2.74 percent from 2.73 percent on Monday.