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The Closing Bell: Health-Care Rally Helps Lift Dow Over 27000: S&P 500 Record Close

TedTed
edited July 11 in The Bullpen
FYI: A rally in health-care stocks pushed the Dow Jones Industrial Average over 27000 for the first time after the Trump administration abandoned a plan to curb drug rebates.

The decision canceled a proposal that would have eliminated rebates from government drug plans, easing concerns of a massive disruption to the U.S. pharmaceutical industry. Shares of UnitedHealth UNH +5.20% jumped 5%, leading the Dow industrials 227 points higher to 27088 in afternoon trading.

Broader stock indexes gave back some of their earlier gains in the afternoon following a jump in bond yields, which rise as bond prices fall. The Dow fell off its highs, the S&P 500 was up .23% and the Nasdaq Composite declined 0.08%. At the same time, the yield on the benchmark 10-year U.S. Treasury note climbed to 2.113% from 2.061% a day earlier.

If the Dow maintains its gains, 372 trading days will have passed since the blue-chip index closed above its last watermark, 26000, in January 2018. Stocks fell a month after that, entering correction territory. Stocks nearly recovered before the fourth quarter’s punishing selloff unraveled the market’s gains, nearly ending its bull run.

The Dow industrials have risen 16% so far this year, while the S&P 500 has jumped nearly 20%, with much of those gains following the Fed’s encouragements of a rate cut.

In the S&P 500, Cigna jumped 9.5%, cutting its year-to-date decline to 7.4%, while CVS Health CVS +4.37% added 4.1%. Despite the gains, the S&P 500’s health-care sector struggled as shares of biotech firms, pharmaceutical companies and life sciences shops broadly declined.

Technology and industrial stocks also notched solid gains following Mr. Powell’s comments, with those sectors gaining 0.2% and 0.5%, respectively, in recent trading.

U.S. government-bond yields, meanwhile, extended early gains after data showed that consumer prices rose in June, a sign inflationary pressures could be stabilizing after a period of weakness. Core inflation, which strips out volatile food and energy prices, rose faster than expected.

That nudged financial stocks higher, gaining 0.6%, as higher interest rates tend to make bank lending more profitable.

Elsewhere, minutes from the European Central Bank’s June policy meeting showed that officials are likely to consider injecting fresh stimulus into the eurozone in light of weak inflation data. The minutes suggest policy makers will weigh cutting the bank’s key interest rate or restarting its €2.6 trillion ($2.92 trillion) bond-buying program.

Stocks in Europe edged lower, reversing an earlier gain, as the pan-continental Stoxx Europe 600 declined 0.1%, logging its fifth straight loss.

Regards,
Ted
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2019-07-11/your-evening-briefing

MarketWatch:
https://www.marketwatch.com/story/stock-futures-edge-higher-after-powell-boosts-expectations-for-fed-rate-cut-2019-07-11/print

WSJ:
https://www.wsj.com/articles/global-stocks-extend-climb-11562832040

Bloomberg:
https://www.bloomberg.com/news/articles/2019-07-10/asian-stocks-set-for-gains-dollar-slips-on-powell-markets-wrap?srnd=premium

IBD:
https://www.investors.com/market-trend/stock-market-today/dow-jones-tops-27000-unitedhealth-stock-goldman-stock-lead-blue-chips/

CNBC:
https://www.cnbc.com/2019/07/11/stock-market-fed-chief-signals-a-rate-cut.html

Reuters:
https://uk.reuters.com/article/us-usa-stocks/dow-tops-27000-healthcare-in-spotlight-after-trumps-decision-on-rebate-idUSKCN1U61HR

U.K:
https://uk.reuters.com/article/uk-britain-stocks/ftse-100-drops-as-healthcare-giants-overshadow-fed-driven-rally-idUKKCN1U60SF

Europe:
https://www.reuters.com/article/us-europe-stocks/european-shares-rise-after-fed-fuels-rate-cut-hopes-ecb-minutes-awaited-idUSKCN1U60R1

Asia:
https://www.marketwatch.com/story/asian-shares-rise-after-fed-signals-us-rate-cut-likely-2019-07-11/print

Bonds:
https://www.cnbc.com/2019/07/11/us-bonds-yields-tick-lower-after-fed-chair-powells-dovish-testimony.html

Currencies:
https://www.cnbc.com/2019/07/11/forex-markets-dollar-federal-reserve-in-focus.html

Oil:
https://www.cnbc.com/2019/07/11/oil-markets-middle-east-gulf-of-mexico-in-focus.html

Gold:
https://www.cnbc.com/2019/07/11/gold-markets-federal-reserve-in-focus.html

WSJ: Markets At A Glance:
https://markets.wsj.com/us

Major ETFs % Change:
https://www.barchart.com/etfs-funds/etf-monitor

SPDR's Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-tracker

SPDR's Bloomberg Sector Performance Pie Chart:
https://www.bloomberg.com/markets/sectors

Current Futures:
https://finviz.com/futures.ashx
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