NEW YORK: The Dow rose 1% on Tuesday, outperforming the benchmark S&P 500 while the healthcare sector provided Wall Street's biggest boost and technology was its biggest drag.
Healthcare led gains among the S&P 500's 11 major sector indexes, hitting a record high. Eli Lilly was the S&P 500's biggest index point contributor while UnitedHealth, Merck & Co, Johnson & Johnson and Amgen helped boost the blue-chip Dow industrials.
Declines in megacap stocks pulled down the communication services sector. Energy shares underperformed as oil prices fell after touching a five-month high. Oil traders were weighing a meeting between the Iranian president and Pakistan's army chief, a US-Iran mediator, against Houthi attacks on Saudi infrastructure and reports of vessel attacks in the Gulf.
Tech stocks take a breather
While the heavyweight technology sector eased 0.3%, it was the biggest index-point drag on the S&P 500 and kept the Nasdaq close to flat. Technology stocks had rebounded on Monday from a selloff last week when investors worried about steep spending and financing costs for AI developments.
"Equity investors are still a little skeptical around the AI trade and the ability for some of these companies to monetise their investments, so you're seeing a bit of a rotation into other areas of the market," said Jim Baird, chief investment officer at Plante Moran Financial Advisors, pointing to advances on Tuesday in small caps and healthcare companies.
"Investors are looking for other opportunities outside of tech, and healthcare is one of the beneficiaries of that," he said.
The Dow Jones Industrial Average rose 529.85 points, or 1.02%, to 52,495.88, the S&P 500 gained 21.84 points, or 0.28%, to 7,712.57 and the Nasdaq Composite lost 6.07 points, or 0.02%, to 26,424.82.
The S&P 500 value index rose 0.9% compared with a 0.2% drop in its growth counterpart. The small-cap Russell 2000 index finished up 1.7%.
With a 1% gain, the financial services sector was the S&P 500's second-biggest index point boost. Defensive sectors also outperformed, with real estate adding 1.7% and utilities climbing 1.2%.
A 1.7% drop in Netflix, a 1.6% decline in Meta and a 1% loss in Google parent Alphabet sent the communication services index down 0.9%.
SpaceX reported a third-quarter profit after the market closed that blew past estimates, boosting its shares 4% in late trading.
Netflix issued a weaker-than-expected forecast for fourth-quarter profit after the bell, and its shares fell 6%.
Meta and Tesla are scheduled to report on Wednesday.
General Motors shares sank 6.8% after the automaker signaled pressure in coming months from higher commodity costs and lower truck sales.
3M rose 5.8% after the company said it was expanding its data-center partnership with Amazon and issued a warrant to an Amazon subsidiary to purchase 3M common stock worth over US$521 million. The industrial conglomerate also raised its full-year profit forecast.
Credit reporting firm Equifax rallied 11.3% after it reported third-quarter profit above analysts' estimates. Hasbro shares jumped 11.2% after the toymaker raised its full-year forecast for both overall revenue and its digital gaming business.
Advancing issues outnumbered decliners by a 2.04-to-1 ratio on the NYSE, where there were 114 new highs and 236 new lows.
On the Nasdaq, 3,245 stocks rose and 1,608 fell as advancing issues outnumbered decliners by a 2.02-to-1 ratio. The S&P 500 posted 22 new 52-week highs and one new low, while the Nasdaq Composite recorded 46 new highs and 266 new lows.
On US exchanges, 15.91 billion shares changed hands compared with the 17.15 billion average for the last 20 sessions.