S&P 500 inches up, lifted by energy stocks

Rising energy stocks helped nudge the Standard & Poor’s 500 close to its record high, but drops for smaller stocks left U.S. indexes mixed Wednesday.

Markets around the world were broadly higher as investors got more evidence that the global economy is strengthening and corporate profits are climbing. The said the U.S. economy is rising “at a solid rate,” even with damage from recent hurricanes, as it announced a decision to hold interest rates steady at their low levels.

The S&P 500 rose 4.10 points, or 0.2%, to 2,579.36. Earlier in the day, it had climbed above its record closing high of 2,581.07 set last week.

The Dow Jones industrial average rose 57.77 points, or 0.3%, to 23,435.01. Other U.S. indexes weakened. The Nasdaq composite fell 11.14 points, or 0.2%, to 6,716.53. The small-cap Russell 2000 index slid 10 points, or 0.7%, to 1,492.78.

Energy stocks led the market, and those in the S&P 500 rose 1.1%; that was the biggest gain among the sectors that make up the index. They climbed after the price of oil topped $55 a barrel to touch its highest level since Jan. 3, though the oil price backtracked as the day went on.

Estee Lauder jumped 9.2% to $122.12, the biggest gain in the S&P 500, after strong sales growth in China and Hong Kong helped it post a bigger profit than analysts expected.

The cosmetics giant joined the growing list of companies that beat analysts’ expectations for earnings in the most recent quarter. Nearly two-thirds of companies in the S&P 500 have posted their quarterly results, and most have topped Wall Street’s forecasts.

They have been reaping better revenue and profits as the economy strengthens, and a report Wednesday showed that private U.S. employers added more jobs last month than economists expected. It raises expectations that Friday’s more comprehensive jobs report will be strong too.

“What we’ve been waiting for the last five-plus years is stronger economic growth leading to better employment numbers, or one feeding into the other, and leading to stronger wage growth,” said Jon Mackay, investment strategist at Schroders. “We just haven’t seen the wage growth part of it, but now we’re seeing the wage growth start to tick through.”

Other economies around the world are also improving, which further raises optimism. “Globally, it tends to have a self-reinforcing effect,” Mackay said. “People buy more goods from the U.S., emerging-market economies do better, banks have the capacity to lend more, and that leads to more capital spending and more consumer spending. At some point, it becomes overdone, but we’re not anywhere close to that yet.”

The weakest part of the stock market Wednesday was smaller stocks. They have generally been rising and falling in recent weeks with expectations that Congress will overhaul the tax system and cut rates. Smaller companies often pay higher tax rates than their bigger rivals.

But House Republicans missed a self-imposed Wednesday deadline for a public release of their tax plan, as members debate whether to change the tax benefits of 401(k) contributions and other details. The rollout appears set for Thursday.

In the commodities market, benchmark U.S. crude slipped 8 cents to settle at $54.30 a barrel. Brent crude, the international standard, fell 45 cents to $60.49. Natural gas was virtually flat at $2.89 per 1,000 cubic feet. Heating oil fell 2 cents to $1.86 a gallon. Wholesale gasoline rose 1 cent to $1.74 a gallon.

Gold rose $6.80 to settle at $1,277.30 an ounce. Silver rose 48 cents to $17.18 an ounce. Copper rose 4 cents to $3.14 a pound.

The 10-year Treasury yield slipped to 2.37% from 2.38%. The two-year yield held steady at 1.60%, and the 30-year yield fell to 2.85% from 2.88%.

The dollar rose to 114.22 yen from 113.71 yen. The euro fell to $1.1620 from $1.1651. The British pound fell to $1.3249 from $1.3282.

In overseas stock markets, the French CAC 40 rose 0.2%, the FTSE 100 in London slipped 0.1% and Germany’s DAX jumped 1.8%. The Japanese Nikkei 225 index climbed 1.9%. South Korea’s Kospi gained 1.3%. The Hang Seng in Hong Kong advanced 1.2%.


2:45 p.m.: This article was updated with closing prices, context and analyst comment.

1:30 p.m.: This article was updated with the close of markets.

This article was originally published at 7 a.m.

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