Rising Bond Yields, Company Earnings Boost U.S. Stocks

Stocks finished broadly higher on Wall Street Thursday as bond yields rose, easing concerns about a troubling drop in long-term yields over the past week.

Gains in financial, technology and industrial stocks outweighed losses in utilities and communications companies. Smaller company stocks outgained the broader market.

Following a sharp rebound from a dismal end to 2018, the benchmark S&P 500 index is on track for its biggest quarterly gain since the third quarter of 2009.

Thursday’s rally, which followed a stumble earlier in the day, came as bond yields rose off their recent lows. The yield on the benchmark 10-year Treasury note rose to 2.39 percent from 2.37 percent late Wednesday.

The S&P 500 gained 10.07 points, or 0.4 percent, to 2,815.44. The Dow Jones Industrial Average rose 91.87 points, or 0.4 percent, to 25,717.46. The Nasdaq composite added 25.79 points, 0.3 percent, to 7,669.17.

The Russell 2000 index of smaller company stocks picked up 12.87 points, or 0.8 percent, to 1,535.10.

Major indexes in Europe finished mostly lower.

Despite an uneven week of trading, the S&P 500 is still up 12.3 percent so far in 2019, a blockbuster start to a year. Still, investors remain anxious about the slowing global economy and worrisome signals coming from the bond market.

Key bond yields fell to their lowest levels in more than a year last Friday and continued to slide this week after the Federal Reserve said it was seeing slower growth in the economy and no longer expected to raise interest rates this year.

The rise in bond yields gave bank stocks a boost. Citigroup gained 2.1 percent. Higher bond yields are good for banks because they can earn more income from the bonds they hold and they can charge higher interest rates.

Encouraging company earnings and outlooks also helped lift stocks Thursday.

Movado jumped 22.8 percent after the watch maker reported strong earnings in its last quarter. Shares in PVH vaulted 14.8 percent after the parent company of Calvin Klein and other brands turned in solid quarterly results.

Accenture was the biggest gainer in the technology sector after the consulting company’s latest quarterly results topped Wall Street’s forecasts. The stock rose 5.2 percent.

Verizon led the slide in communications services stocks, shedding 3 percent.

Traders brushed off a discouraging U.S. economic snapshot. The Commerce Department said U.S. economic growth slowed sharply in the last three months of 2018 to an annual rate of just 2.2 percent, reflecting weakness in consumer spending, business investment, government spending and housing.

Looking ahead, investors have their eye on several potential market-moving developments.

Chinese and U.S. trade negotiators are preparing for the latest round of talks aimed at ending a tariff war between the world’s two biggest economies. And in the United Kingdom, the countdown to Britain’s departure from the EU loomed Friday.

In addition, the next big wave of corporate earnings kicks into gear in mid-April.

Benchmark U.S. crude fell 0.2 percent to settle at $59.30 a barrel. Brent crude, used to price international oils, closed little changed at $67.82 a barrel.