U.S. stocks were holding on to modest gains in afternoon trading Tuesday after a strong rally lost much of its early momentum.
Health care and financial companies accounted for much of the market’s gains after a surge in technology stocks mostly faded. Biogen climbed 5.7 percent and Zions Bancorporation rose 2 percent. Banks benefited from rising bond yields, which allow them to charge higher rates on loans.
Energy companies led the S&P 500 higher as the price of U.S. crude oil moved briefly above $60 a barrel. It settled at $59.94. Oil hasn’t closed above $60 a barrel since November.
Homebuilders slumped on new data showing the pace of newly started residential construction projects fell sharply last month.
Even after losing early strength, the broad upward turn in stocks marked a reversal for the market, which started the week on a downbeat note after racking up losses last week as investors’ jitters over a global economic slowdown intensified. That led to a troubling drop in long-term bond yields that spooked investors.
On Tuesday the yield on the benchmark 10-year Treasury note rose to 2.42 percent, up from 2.41 percent late Monday. However, it’s still slightly below the yield on the three-month Treasury bill, which many see as a warning sign of a possible recession.
Despite the market’s recent gyrations, the benchmark S&P 500 index is still up more than 12 percent so far in 2019, an unusually strong start to a year, and on course for a solid first quarter.
ANALYST’S TAKE: “A lot of today’s move has to do with the change in direction in the yield curve,” said Lindsey Bell, investment strategist at CFRA. “It just goes to show that we’re kind of in a period of indecisiveness in the market, where the market is grappling with what is obviously slowing growth around the globe and a little bit of uncertainty here in the U.S. about what growth is going to look like once we get past the seasonally weak first quarter.”
KEEPING SCORE: The Dow Jones Industrial Average rose 63 points, or 0.3 percent, to 25,580 as of 2:52 p.m. Eastern Time. The S&P 500 index gained 0.4 percent and the Nasdaq composite added 0.3 percent. The Russell 2000 index of smaller company stocks picked up 0.5 percent.
Major European indexes finished higher, rebounding from a day earlier.
DISSAPOINTING DATA: Investors mostly shrugged off two new bellwether reports on the economy that fell short of economists’ forecasts. The Conference Board, a business research group, said its consumer confidence index fell to 124.1 in March from 131.4 in February.
And the Commerce Department said the number of homes under construction fell 8.7 percent last month as ground breakings for single-family houses declined to their lowest level in nearly two years. Single-family housing starts are running 2.3 percent below last year’s pace.
The housing starts data weighed on homebuilder stocks. D.R. Horton slid 1.9 percent.
BIG APPLE: Shares in Apple dropped 0.3 percent, giving up an early gain, a day after the consumer electronics giant announced a suite of new services to run on its devices.
The company plans to launch a subscription TV service dubbed Apple TV Plus, which will be ad-free and will compete with big streaming services including Netflix and Amazon Video.
BOARDROOM BRAWL: Bed Bath & Beyond soared 20.3 percent in heavy trading after The Wall Street Journal reported that the troubled retailer is being targeted by three activist investors.
ROUGH SEAS: Carnival slumped 9.8 percent after the cruise line operator’s latest quarterly results fell short of Wall Street’s forecasts. The company also issued a weaker-than-expected second-quarter earnings outlook.
ENERGY: Benchmark U.S. crude climbed 1.9 percent to settle at $59.94 a barrel. Brent crude, used to price international oils, added 0.3 percent to close at $67.97 a barrel.
The pickup in oil prices helped boost energy stocks. Anadarko Petroleum rose 3.1 percent