Technology, healthcare companies lead US stocks higher

Stocks moved broadly higher in early trading on Wall Street Tuesday, extending the market’s solid gains from the day before.

Technology and healthcare stocks accounted for much of the gains. Autodesk rose 1.8 per cent and Regeneron Pharmaceuticals added 2.1 per cent.

Energy companies also rose along with the price of crude oil. Occidental Petroleum added 1.2 per cent.

This week’s gains have helped the stock indexes claw back more of their losses from last week, when another escalation in the trade war between the US and China roiled the market.

Investors found reason to be tentatively optimistic again about the potential for progress in the costly trade conflict on Monday after President Donald Trump said his negotiators had received encouraging calls from China over the weekend. Traders drew encouragement from the development, even though China’s foreign ministry denied knowledge of any such calls.

Market watchers are becoming increasingly circumspect about what lies ahead. UBS, the largest wealth manager in the world, recommended that customers reduce their exposure to stocks, the first time the bank has done so since the depths of Europe’s debt crisis in 2012.

Major US indexes are on track for losses of 3 per cent or more in August in what has been a volatile month for the market. Investors are trying to gauge whether trade conflicts and slowing economies around the world will drag the US into a recession.

The S&P 500 was up 0.4 per cent as of 10:08 a.m. Eastern Time. The Dow Jones Industrial Average gained 89 points, or 0.4 per cent, to 25,991. The Nasdaq rose 0.6 per cent.

Major indexes in Europe were broadly higher.

On Friday, China announced new tariffs on $75 billion in US goods. Trump responded angrily on Twitter, at one point saying he “hereby ordered” US companies with operations in China to consider moving them to other countries, including the US.

Trump later announced the US would increase existing tariffs on $250 billion in Chinese goods to 30 per cent from 25 per cent, and that new tariffs on another $300 billion of imports would be 15 per cent instead of 10 per cent.

Stocks headed higher even though the yield on the benchmark 10-year Treasury dropped back below the yield on the two-year Treasury. This so-called inversion of the US yield curve has accurately predicted the past five recessions. When the yield curve inverted earlier this month for the first time since 2007, it led to a broad market sell-off.

The 10-year Treasury yield fell to 1.51 per cent from 1.54 per cent late Monday. The yield on the two-year Treasury rose to 1.55 per cent from 1.53 per cent on Monday.

Johnson & Johnson rose 3 per cent after a ruling against the company in an Oklahoma opiod case wound up being less than investors were expecting.

Troubled pizza company Papa John’s rose 6.2 per cent after naming a new CEO.

J.M. Smucker sank 9.3 per cent after turning in weak result.

AP