By Caitlin Ostroff and Michael Wursthorn
U.S. stocks rose Thursday, putting major indexes on track to notch a trio of record closes and resuming a year-end rally.
Consumer staples and technology stocks led major indexes higher after companies in those sectors offered further reassurances to investors that economic growth remains solid. Conagra Brands, the maker of Slim Jim, Duncan Hines and other food products, reported strong earnings, sparking a rally among shares of packaged food makers, while memory-chip maker Micron Technology said it has hit the “bottom”of a rough period.
Those developments pushed up shares of both companies, along with their broader sectors. That helped the S&P 500 add 0.3% in recent trading, putting the broad index on pace to notch a fresh record.
The Dow Jones Industrial Average and Nasdaq Composite were also on track to close at new highs. The Dow was up 136 points, or 0.5%, to 28374, while the Nasdaq Composite added 0.4%.
At the same time, investors were weighing the broader implications of the House’s decision late Wednesday to impeach President Trump, making him the third U.S. president ever to face a trial in the Senate, where odds of a conviction are low. For now, analysts and investors say they are monitoring the situation and aren’t factoring the political ruckus into their investment decisions.
“Impeachment is on the peripheral of investors’ psyche,” said Thomas Hainlin, global investment strategist at U.S. Bank Wealth Management. “Unless there is a material change in the probability of a conviction in the Senate, it remains on the sidelines for us.”
Mr. Hainlin said of all the political developments, trade negotiations continue to play a major role in investors’ day-to-day decisions. The U.S.’s recent trade truce with China helped spur the latest leg of the market’s rally this year, analysts said. If the two countries sign the deal next month, making the pact official, markets would likely get another boost higher, analysts added.
On Thursday, Conagra led the S&P 500 higher, rising 18% after the packaged foods maker reported better-than-expected earnings and sales for its second fiscal quarter. That helped shares of several other consumer-staple stocks advance, pulling the sector up 0.5% in recent trading.
Micron Technology also lifted the S&P 500, adding 3.2% despite reporting its fifth consecutive period of double-digit revenue declines in its fiscal first quarter. Investors instead focused on the company’s optimistic outlook on future performance after the semiconductor company called the current quarter “the cyclical bottom for our financial performance.”
Shares of other chip companies rose, including Nvidia, up 2.4%, and Advanced Micro Devices, which added 2.2%.
In Europe, stocks were little changed after Sweden’s central bank became the first to exit negative rates.
Government-bond yields in the region climbed after Sweden’s Riksbank increased interest rates to zero. The move prompted some investors to wager that policy makers at the European Central Bank, who have been watching the broader effect of the Swedish experience, would reassess the impact of subzero rates on the region’s economy.
The yield on 10-year German bunds rose to minus 0.210%, from minus 0.2470% Wednesday. The rate on the Swedish, Greek and Italian bonds also climbed.
Bond yields in the U.S. also edged higher. The yield on the 10-year U.S. Treasury note rose to 1.936%, according to Tradeweb, from 1.922% a day earlier.
“Based on the Riksbank’s announcement today, the era of negative rates might be over,” said Sebastien Galy, a senior macro credit strategist at Nordea Asset Management. “This is basically our bet.’ ‘
Write to Caitlin Ostroff at [email protected] and Michael Wursthorn at [email protected]
(END) Dow Jones Newswires
December 19, 2019 12:04 ET (17:04 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
