FILE - In this May 29, 2019, file photo specialists James Denaro, left, and Mario Picone work on the floor of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EDT on Wednesday, June 5. (AP Photo/Richard Drew, File)

US stocks rise again, though energy shares slump with oil

June 05, 2019 - 11:52 am

NEW YORK (AP) — U.S. stocks rose in midday trading on Wall Street Wednesday, although a slide in energy companies tempered the market's gains.

Energy stocks fell as the price of crude oil plunged 4% following a report showing an unexpected surge in U.S. crude oil supplies. Exxon Mobil fell 0.9% and Halliburton fell 3.8%.

Bond prices rose, sending yields on the 10-year Treasury down to 2.12%, following a particularly weak employment report from payroll processor ADP. The private survey showed that U.S. companies added the fewest jobs in nine years, as manufacturers, construction firms and mining companies cut workers. The results fell far short of economists' forecasts.

The sudden dip in bond yields weighed down financial stocks, particularly banks, which stand to make less money on loan interest if yields are low. Bank of America fell 1.4% and Citigroup fell 1%.

Investors pushed the market higher earlier in an extension of Tuesday's rally prompted by signs that the Federal Reserve is willing to cut rates to reinforce economic growth.

Federal Reserve Chairman Jerome Powell helped spark a rally after remarks that signaled to investors that the Fed could cut rates this year. He said the central bank was "closely monitoring" trade developments and would "act as appropriate" to sustain the U.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. Apple rose 1.6% and Microsoft rose 1.3%. Salesforce rose 3.2% after blowing away profit forecasts.

Investors also snapped up health care stocks. UnitedHealth Group rose 1.3% and Pfizer rose 1.1%.

Utilities, which are considered a less-risky investment, were among the biggest gainers. Investors typically snap up those stocks when they are concerned about economic growth. Entergy rose 2.4%.

Industrial stocks also rose broadly, with notable gains by airlines energy as costs fell. Southwest Airlines rose 1.3% and Delta rose 1.5%.

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 rose 0.4% as of 11:30 a.m. Eastern time. The Dow Jones Industrial Average rose 145 points, or 0.5%, to 25,472. The Nasdaq composite rose 0.4%.

WEAK GAME: Video game retailer GameStop plunged 38% after eliminating its quarterly dividend. The stock is now down 62% 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 rose 6.7% 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 rose 8.6% 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.

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