Stocks moved broadly higher on Wall Street in afternoon trading Wednesday, on track to extend the market’s strong gains from the previous day.
A steep drop in crude oil prices tempered the gains, sending energy stocks lower. Benchmark U.S. crude plunged 3% to $51.90 a barrel following a report showing an unexpected surge in U.S. crude supplies. U.S. crude has declined in five of the past six weeks. Exxon Mobil fell 0.6% and Halliburton slid 3.8%.
Traders shrugged off a report from payroll processor ADP that showed private U.S. companies added the fewest jobs in nine years last month, as manufacturers, construction firms and mining companies cut workers. The results fell far short of economists’ forecasts.
Signs that the Federal Reserve is willing to cut interest rates to reinforce economic growth are encouraging traders to bid up stocks after a stumbling start to the week.
Federal Reserve Chairman Jerome Powell said Tuesday that the central bank was “closely monitoring” developments in the United States’ multiple trade conflicts and would “act as appropriate” to sustain the nation’s economic expansion.
Investors now expect the central bank to cut rates at least once and possibly two or more times before year’s end, in part because of the consequences of the trade war.
Stocks slumped broadly in May as investors grew increasingly anxious over global trade disputes. An escalating trade war between the U.S. and China and the added threat of a new trade war with Mexico sent investors fleeing to safer holdings, like bonds.
Technology companies were among the most notable gainers Wednesday. Apple rose 1.6% and Microsoft added 1.3%. Salesforce climbed 3.6% after blowing away profit forecasts.
Traders also snapped up health care stocks. Boston Scientific gained 2.5% and Medtronic rose 2.3%.
Industrial stocks also rose broadly, with notable gains by airlines as fuel costs fell. American Airlines Group gained 3.7% and Southwest Airlines rose 1.9%.
A trickle of corporate earnings reports moved several stocks. GameStop plummeted after the videogame maker badly missed sales estimates in the first quarter. Pivotal Software took a nosedive after the cloud-computing company slashed its revenue forecast for the year.
KEEPING SCORE: The S&P 500 index was up 0.7% as of 1:34 p.m. Eastern time. The Dow Jones Industrial Average climbed 172 points, or 0.7%, to 25,504. The Nasdaq composite rose 0.5%. The Russell 2000 index of smaller companies posted a slim gain.
Major stock indexes in Europe were broadly higher.
WEAK GAME: Video game retailer GameStop plunged 37.8% after it eliminated its quarterly dividend. The stock is now down 61.5% this year.
The company has been struggling as it contends with more competition from companies selling consoles and games online. Global sales fell 13.3% during the most recent quarter, falling far short of Wall Street forecasts. Sales at established stores also fell far short of forecasts.
GameStop is also in the midst of a cost-cutting program and coming off of a recent leadership shake up.
PLENTIFUL PURSE: Vera Bradley climbed 7.9% after the handbag and accessories company reported solid first quarter profit and revenue results. Sales at established stores blew past Wall Street forecasts.
The company also gave investors a surprisingly good revenue forecast for the current quarter and tightened its outlook for the year.
CANNED PROFIT: Campbell Soup jumped 9.1% after the iconic soup company swung to a fiscal third quarter profit and beat Wall Street forecasts.
The company, which also makes Pepperidge Farm cookies and V8 juice, also beat revenue forecasts for the quarter and said sales growth was fueled by its snacks business.
— Associated Press