U.S. Stocks Higher as Banks and Technology Companies Rebound

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Traders work on the floor of the New York Stock Exchange on Thursday. (AP Photo/Richard Drew)

U.S. stocks are edging higher early Thursday afternoon as technology companies and banks advance. The market is regaining most of the previous day’s losses following a round of improved company earnings, but drugmakers are struggling. European stocks are climbing after the European Central Bank said it will begin reducing the bond purchases it’s been making to prop up the economy, although some buying will continue until at least September 2018.

KEEPING SCORE: The Standard & Poor’s 500 index rose 8 points, or 0.3 percent, to 2,565 as of 12:22 a.m. Eastern time. The Dow Jones Industrial Average gained 98 points, or 0.4 percent, to 23,426. The Nasdaq composite rose 7 points, or 0.1 percent, to 6,571. The Russell 2000 index of smaller-company stocks added 6 points, or 0.4 percent, to 1,499.

BONDS: Bond prices were little changed. The yield on the 10-year Treasury note stayed at 2.44 percent. Banks had fallen with the rest of the market on Wednesday in spite of a jump in bond yields. Higher bond yields and interest rates mean banks can make larger profits from mortgages and other lending, and bond yields are trading around seven-month highs.

Wells Fargo rose 56 cents, or 1 percent, to $55.82; and Northern Trust gained $1.25, or 1.3 percent, to $96.02.

I’M OK, EURO-K: Investors were pleased with the European Central Bank’s actions. The bank will cut its monthly bond purchases in half starting in January, but said it will continue to make those purchases until at least September and could increase the purchases again if the regional economy runs into trouble. France’s CAC-40 jumped 1 percent, and the DAX in Germany gained 0.9 percent. Britain’s FTSE 100 added 0.4 percent.

The euro fell to $1.1717 from $1.1807 as investors think interest rates in Europe will stay lower for longer than they had expected.

THE QUOTE: Scott Wren, senior global equity strategist for Wells Fargo Investment Institute, said investors were relieved the bank did not announce a bigger cut in bond purchases or take more aggressive steps.

“The market was a little bit fearful that the ECB was going to be more hawkish,” he said. “That wasn’t the case.”

Still, Wren said the ECB and the Federal Reserve might both end up raising interest rates further and faster than investors currently expect, and that could have a big effect on stocks in 2018.

“The market should be worried about the Fed raising rates three times next year like they’ve hinted, even though the market hasn’t believed that all along,” he said.

FRIGHTENING FORECAST: Drugmaker Celgene plunged after it reduced its forecasts for this year, partly because it expects weaker sales of its critically important new psoriasis treatment Otezla. Celgene also said it won’t meet its longer-term goals: It cut its profit and sales projections for the year 2020 as it anticipates weaker sales of new products and medications to treat cancer and inflammation. It now expects $19 billion to $20 billion in revenue that year, below its previous target of at least $21 billion.

Celgene stock lost $21.64, or 18.1 percent, to $97.90. Competitor Amgen fell $1.79, or 1 percent, to $175.68 in spite of a solid third-quarter report.

VERIFIED ACCOUNTS: Twitter shares soared after the social media site reported better-than-expected adjusted profit in the third quarter. It lost $21.1 million in the period, but before one-time charges and benefits it made 10 cents a share, 2 cents better than analysts forecast. Shares jumped $2.99, or 17 percent, to $20.12.

DISTRIBUTE THE WEALTH: Prescription drug distributor McKesson surpassed analyst estimates in its fiscal second quarter, and its stock climbed $7.49, or 5 percent, to $159.04. Competitor AmerisourceBergen rose $2.78, or 3.4 percent, to $85.04; and Cardinal Health advanced $1.37, or 2 percent, to $68.39. The stocks have struggled in the last few years as investors worry about lower prices for medications.

CAN’T BULK UP: Nutritional supplement retailer GNC fell 74 cents, or 9 percent, to $7.41 after its quarterly results fell short of Wall Street projections. Weight loss company Nutrisystem gave up $6.27, or 10.8 percent, to $52.03.

ENERGY: Benchmark U.S. crude dipped 21 cents to $51.97 a barrel in New York. Brent crude, used to price international oils, sank 34 cents to $58.10 barrel in London.

ASIA: Japan’s benchmark Nikkei 225 index edged 0.2 percent higher while South Korea’s Kospi dipped 0.5 percent. The Hang Seng in Hong Kong slipped 0.4 percent.

The dollar rose to 113.85 yen from 113.72 yen.

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