Wall St. gains as small-cap Russell 2000 hits record
By Stephen Culp (Reuters) - Retail and technology stocks led Wall Street higher on Wednesday and the small-cap Russell 2000 hit a record peak, even as a rise in U.S. bond yields to an almost seven-year high suggested more competition for equities and investors fretted over geopolitics. Smaller companies continued this year's trend of outperforming their larger rivals with the Russell 2000 reaching a record high
By Stephen Culp
(Reuters) - Retail and technology stocks led Wall Street higher on Wednesday and the small-cap Russell 2000 hit a record peak, even as a rise in U.S. bond yields to an almost seven-year high suggested more competition for equities and investors fretted over geopolitics.
Smaller companies continued this year's trend of outperforming their larger rivals with the Russell 2000 <.RUT> reaching a record high. The index ended up 1 percent.
"Small caps present a cleaner play than large caps on two fundamental market drivers: lower corporate taxes and a stronger US economy," research firm DataTrek wrote in its morning briefing.
The results also boosted shares of rival department stores J.C. Penney Co Inc
"I think corporate earnings have been remarkably strong," said David Carter, chief investment officer at Lenox Wealth Advisors in New York. "The concern is really more about the future and decelerating growth."
Macy's earnings pushed the consumer discretionary sector higher, a day after government data showing an acceleration of consumer spending fanned inflation concerns and helped send U.S. government bond yields higher.
Yields on 10-year U.S. Treasuries hit 3.10 percent for the first time since July 2011, continuing to pressure stocks as investors consider whether U.S. government bonds pose a more attractive option to riskier equities.
"As yields go up, they start to be a little bit more competitive with risk assets and with stocks in particular," said Katie Nixon, chief investment officer for the wealth management division of Northern Trust in Chicago.
Weeks of diplomatic progress were thrown into doubt when North Korea postponed high-level talks with Seoul and threatened to pull out of its historic meeting with the United States.
The uncertainty compounded investor jitters ahead of United States-China trade negotiations.
"The general consensus seems to be we'll come to some sort of trade agreement," Carter said. "But it may be choppy until we get there."
The Dow Jones Industrial Average <.DJI> rose 62.52 points, or 0.25 percent, to 24,768.93, the S&P 500 <.SPX> gained 11.01 points, or 0.41 percent, to 2,722.46, and the Nasdaq Composite <.IXIC> added 46.67 points, or 0.63 percent, to 7,398.30.
Of the 11 major sectors of the S&P 500, only rate-sensitive utilities <.SPLRCU> and real estate <.SPLRCR> stocks closed in negative territory.
The tech sector <.SPLRCT> rose 0.4 percent, and gave the S&P 500 its biggest boost among the major sectors.
Micron Technology Inc
Advancing issues outnumbered declining ones on the NYSE by a 1.92-to-1 ratio; on Nasdaq, a 1.95-to-1 ratio favored advancers.
The S&P 500 posted 15 new 52-week highs and three new lows; the Nasdaq Composite recorded 128 new highs and 48 new lows.
Volume on U.S. exchanges was 6.22 billion shares, compared to the 6.66 billion average for the full session over the last 20 trading days.
(Reporting by Stephen Culp; Additional reporting by Lewis Krauskopf; Editing by Leslie Adler)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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