Stocks are pulling mostly higher in afternoon trading on Wall Street after shaking off some wobbles from earlier in the day. Gains for banks and industrial companies are offsetting weakness in Big Tech stocks.
Energy companies were also lower as the price of crude oil sank. Investors were also digesting a round of encouraging reports on the economy.
The S&P 500 rose 0.4% for the latest round of back-and-forth trading it’s gone through the last few weeks.
The market has been mostly tumbling in place recently, with support for stocks coming from expectations that the economy will soar soon thanks to COVID-19 vaccinations and huge amounts of spending by Washington. A quick rise in interest rates has undercut stocks at the same time, though.
The Dow Jones Industrial Average was up 126 points, or 0.4%, at 32,554, as of 3:11 p.m. Eastern time. The Nasdaq was up 0.1%. The Russell 2000 index of smaller stocks was doing much better than the rest of the market with a 1.7% gain.
Stocks of energy producers dropped to the market’s sharpest losses after the price of U.S. oil slumped 4.3% to close at $58.56 a barrel. Diamondback Energy fell 1.6%, and Halliburton dropped 1.7%.
The slump in the price of crude oil followed a 6% jump a day earlier, when it climbed above $61 per barrel after a skyscraper-sized cargo ship wedged itself across Egypt’s Suez Canal and raised worries about supply disruptions.
Yields in the Treasury market also continued to ease after the 10-year yield spiked above 1.70% last week, its highest level since before the pandemic started. The 10-year Treasury yield, which helps set rates for all kinds of loans, remained unchanged at 1.61% from late Wednesday.
The decline came despite a report showing that the number of workers filing for unemployment benefits eased to its lowest level since before the pandemic erupted a year ago. Another report said the U.S. economy grew at a faster pace at the end of 2020 than earlier estimated.
Moves in Treasury yields have been a major reason for the swings in the stock market in recent weeks. When bonds pay more in interest, they make investors less willing to pay high prices for stocks. Businesses that are asking investors to wait many years for their big profits to begin rolling in are affected even more.
Technology stocks have borne the brunt of the pain of higher interest rates, and they’re also among the biggest companies in the market in terms of value.
Investors have been moving money away from expensive tech stocks as part of a broader shift to stocks tied more closely to economic growth. There’s a good chance the recovery could be surprisingly strong with little interference from the Federal Reserve, said Andrew Slimmon, portfolio manager at Morgan Stanley Investment Management.
“There is a very clear message that the Fed is going to sit back and let the economy grow at a hotter rate because their number one priority is unemployment,” he said. “That means there’s a good chance the economy overshoots.”
Big tech stocks swung back and forth in earlier trading and were nearly evenly split within the broader S&P 500 index. Microsoft fell 1% and Cisco rose 1.9%.
Treasury yields have been broadly rising with expectations for stronger economic growth and the inflation that may accompany it. The market got a particularly hard jolt a month ago, when an auction of seven-year Treasurys found relatively few bidders. Analysts called it a “horrifically bad” auction, and it helped send yields jumping. A bond’s yield rises when its price drops.
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AP Business Writer Elaine Kurtenbach contributed.