NEW YORK, Nov 6 — The S&P 500 and the Dow Jones Industrial Average rose yesterday, as oil prices lifted energy stocks and defensive sectors such as utilities and real estate were in demand as investors were cautious about Iran sanctions and US congressional elections.
The energy sector, which has lagged the broader S&P 500 this year, was up 1.6 per cent after the United States imposed a range of punitive sanctions on Iran, lifting oil prices.
“Anytime utilities and consumer staples are up that’s a little fear … it’s the Iran sanctions poking a stick at a part of the world that’s famous for not being amenable to that,” said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh.
Investor aversion to risk the day before US midterm elections also helped to put pressure on sectors such as technology, communications services and consumer discretionary.
“Regardless of your political bent you don’t know what’s going to happen on Tuesday that’s going to affect the next few years so you’re going for safety,” said Forrest.
Opinion polls showed a strong chance of President Donald Trump’s Republican Party holding the Senate but losing control of the House of Representatives to the Democrats — a potential hurdle to Trump’s pro-business agenda, which has been a major driver of the stock market’s rally since the 2016 election.
At 2.43pm ET, the Dow Jones Industrial Average rose 201.78 points, or 0.8 per cent, to 25,472.61, the S&P 500 gained 17.2 points, or 0.63 per cent, to 2,740.26 and the Nasdaq Composite dropped 28.27 points, or 0.38 per cent, to 7,328.72.
Among the S&P 500’s 11 major sector indexes, the real estate sector was up 1.9 per cent making it the biggest percentage gainer. Utilities rose 1.3 per cent while consumer staples was up 1.2 per cent.
A 3 per cent drop in Apple shares represented the biggest drag on Nasdaq after a Nikkei report that the company had told its smartphone assemblers to halt plans for additional production lines dedicated to the iPhone XR.
The stock was on track to post its worst two-day loss since January 2013, after the company’s disappointing holiday-quarter forecast sent its shares down 6.6 per cent on Friday.
Berkshire Hathaway jumped 5.7 per cent after the conglomerate run by billionaire Warren Buffett said its quarterly operating profit doubled.
The gains helped lift the S&P financial index 1.6 per cent ahead of the Federal Reserve’s two-day monetary policy meeting starting tomorrow.
Investors have been worried about tightening US monetary policy, especially after a string of strong economic data, including Friday’s jobs report.
Advancing issues outnumbered declining ones on the NYSE by a 1.81-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favoured decliners.
The S&P 500 posted 11 new 52-week highs and one new low; the Nasdaq Composite recorded 32 new highs and 51 new lows. — Reuters
Source: The Malay Mail Online