NEW YORK: The Dow rose 1 per cent on Tuesday (Oct 20), outperforming the benchmark S&P 500 while the healthcare sector provided Wall Street's biggest boost and technology was its biggest drag.
Healthcare .SPXHC 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 .SPLRCL sector. Energy .SPNY 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 .SPLRCT sector eased 0.3 per cent, 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 sceptical around the AI trade and the ability for some of these companies to monetize 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 .DJI rose 529.85 points, or 1.02 per cent, to 52,495.88, the S&P 500 gained 21.84 points, or 0.28 per cent, to 7,712.57 and the Nasdaq Composite lost 6.07 points, or 0.02 per cent, to 26,424.82.
The S&P 500 value index .IVX rose 0.9 per cent compared with a 0.2 per cent drop in its growth counterpart .IGX. The small-cap Russell 2000 index .RUT finished up 1.7 per cent.
With a 1 per cent gain, the financial services sector .SPSY was the S&P 500's second-biggest index point boost. Defensive sectors also outperformed, with real estate .SPLRCR adding 1.7 per cent and utilities .SPLRCU climbing 1.2 per cent.
A 1.7 per cent drop in Netflix, a 1.6 per cent decline in Meta and a 1 per cent loss in Google parent Alphabet sent the communication services index down 0.9 per cent.
SpaceX reported a third-quarter profit after the market closed that blew past estimates, boosting its shares 4 per cent in late trading.
Netflix issued a weaker-than-expected forecast for fourth-quarter profit after the bell, and its shares fell 6 per cent.
Meta and Tesla are scheduled to report on Wednesday.
General Motors shares sank 6.8 per cent after the automaker signalled pressure in coming months from higher commodity costs and lower truck sales.
3M MMM.N rose 5.8 per cent after the company said it was expanding its data-centre 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 per cent after it reported third-quarter profit above analysts' estimates. Hasbro shares jumped 11.2 per cent 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.