United States stocks brush off year's first wobble, return to records

Marco Green
January 13, 2018

Interest rates also climbed after a report showed that a key component of inflation accelerated last month.

Concerns about rising interest rates are sending stocks slightly lower on Wall Street, threatening to end a six-day New Year's rally.

The S&P 500 rose 18.68 points, or 0.7 percent, to 2,786.24 on Friday to close out its seventh week of gains in the last eight.

Telecom stocks and utility stocks in the S&P 500 each fell 0.9 percent, tied for the worst performance in the index.

The Dow Jones industrial average climbed 228.46, or 0.9 percent, to 25,803.19, the Nasdaq composite rose 49.28, or 0.7 percent, to 7,261.06 and the Russell 2000 index of small-cap stocks gained 5.18, or 0.3 percent, to 1,591.97.

Bank stocks also gained from a rise in Treasury yields after underlying US consumer prices for December posted their biggest gain in 11 months, signaling a pickup in inflation.

On the economic front, USA import prices ticked up 0.1 percent in December, the Labor Department reported Wednesday, following a 0.8-percent rise the previous month.

Bond prices fell. The 10-year Treasury yield rose to 2.58 percent.

The yield on the 10-year Treasury note rose to 2.51 percent from 2.48 percent late Monday, which raises their appeal relative to dividend-paying stocks for investors seeking income.

Although a quick jump in rates could easily jolt markets out of their calm ride, experts say markets are prepared for rates to rise gradually. Whether investors are anxious about a future pickup in rates or about how stocks have become more expensive than usual, any dip for the market over the previous year has been shallow and short.

FOLLOWING THE MOMENTUM: Stocks have been steadily rising for more than a year as investors bask in an economy where countries around the world are finally all growing in sync.

But some caution is starting to creep in as prices keep climbing.

Boston Scientific was at the front of the pack after it gave preliminary results for its revenue last quarter, which were stronger than Wall Street was expecting.

"There shouldn't be a falling-off-the-cliff mentality, but we're so primed", she said. "We try not to be greedy about it". The next test for the market may arrive in coming weeks as companies report their profits from the last three months of 2017.

That helped drive energy stocks in the S&P 500 to a 2% gain, the largest among the 11 sectors that make up the index.

BlackRock (BLK.N) rose 3 percent after the world's largest asset manager reported profit that beat estimates as investors flooded into the relatively low-priced funds.

Among other stocks, Facebook fell 4 percent after the company started changing the way it filters posts and videos on News Feed.

Sales at online retailers soared 1.2 percent in December.

In markets overseas, Japan's Nikkei 225 index lost 0.2 percent, South Korea's Kospi advanced 0.3 percent and Hong Kong's Hang Seng jumped 0.9 percent. The Nasdaq composite climbed 58.21 points, or 0.8%, to 7,211.78. The euro was flat at $1.1948.

The dollar slipped to 111.09 yen from 111.35 yen.

In the commodities markets, benchmark US crude rose 50 cents to settle at $64.30 per barrel. Brent crude, the worldwide standard, gained 10 cents to $67.88 per barrel.

Micron Technology fell 2.3 percent and UnitedHealth Group lost 1 percent.

Natural gas rose 18 cents to settle at $3.08 per 1,000 cubic feet, heating oil was almost flat at $2.08 per gallon and wholesale gasoline was steady at $1.84 per gallon.

Other reports by Click Lancashire

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