NEW YORK: Stocks rose Tuesday, snapping a three-day retreat, as hospital and health-insurance stocks rallied ahead of Friday’s employment report and the start of fourth-quarter earnings season this week.
UnitedHealth Group Inc. and Johnson & Johnson rose more than 2.1 percent, leading gains in the Dow Jones industrial average, after brokerages raised their stock ratings. Pharmacyclics Inc. jumped 20 percent after its leukemia medicine met a trial’s goals. Netflix Inc. slid 5.6 percent as Morgan Stanley said the company faces more competition.
The Standard & Poor’s 500 index advanced 0.6 percent to 1,837.88. The gauge lost 1.2 percent from Jan. 2 through Monday, the longest stretch of declines to start a year since 2005. The index climbed 30 percent last year, the most since 1997. The Dow average added 105.84 points on Tuesday, or 0.6 percent, to 16,530.94.
“Equities are the place to be,” said John Lynch, the Charlotte-based regional chief investment officer for Wells Fargo Private Bank. His firm manages $170 billion.
Alcoa Inc., which has operations in Barberton, will mark the unofficial start of the fourth-quarter earnings season when it reports results after the market closes on Thursday. Earnings for companies in the S&P 500 will climb 9.7 percent on average this year, almost twice the rate of 2013, while sales will probably increase 3.8 percent, according to analyst estimates compiled by Bloomberg.
The ADP Research Institute reports the change in companies’ payrolls and minutes from the Federal Reserve’s December meeting will be released today. The Labor Department will provide the unemployment rate and new hiring figures for last month on Friday. The Fed, which has made job creation a condition for reducing asset purchases, said on Dec. 18 that it would slow the pace of bond buying.
Three rounds of stimulus have helped propel the S&P 500 higher by as much as 173 percent from a 12-year low in 2009. Janet Yellen won Senate confirmation with a 56-26 vote to become the 15th chairman of the Fed. She will replace Ben S. Bernanke, whose second term as chairman expires Jan. 31.
Data on Tuesday showed the trade deficit in the U.S. shrank more than forecast in November as oil imports dropped to the lowest level in three years and exports climbed to a record. The gap narrowed 12.9 percent to $34.3 billion, smaller than projected by any economist surveyed by Bloomberg and the least since October 2009, figures from the Commerce Department showed.