Stocks closed higher on Thursday as Wall Street digested more corporate earnings reports, solid retail data and two highly anticipated initial public offerings.
The Dow Jones Industrial Average rose 110 points to 26,559.54 as shares of Travelers advanced. The S&P 500 gained 0.2% to end the day at 2,905.03, led by industrials. The Nasdaq Composite closed just above the flatline at 7,998.06. U.S. markets will be closed on Friday due to Good Friday.
Honeywell rose more than 3% on better-than-expected earnings while United Rentals surged 8.2% on its quarterly numbers. Dow member Travelers Cos gained 2.3% on its earnings report while Snap-on jumped 6.5%.
The earnings season is off to a good start. So far, more than 78% of the S&P 500 companies that have reported have topped analyst expectations, according to FactSet.
“What can we infer about the early 1Q 2019 reporters? The results are coming in ‘better than feared,’” wrote Nick Raich, CEO of The Earnings Scout. “While the rate of 1Q 2019 earnings growth (+5.60%) is down significantly from how these same companies grew 4Q 2018 earnings (+21.02%), it is positive growth and not the negative earnings growth so many were forecasting just a few weeks ago.”
Better-than-expected retail sales data also lifted sentiment on Wall Street.
Retail sales in the U.S. rose by 1.6% last month, the strongest gain since September 2017. Economists polled by Refinitiv expected a gain of 0.9%.
“The retail sales figures add to the slightly more positive tone of the recent data and provide some comfort that the economy isn’t falling off a cliff,” wrote Andrew Hunter, senior U.S. economist at Capital Economics, in a note. “But they don’t change our view that the fading of the fiscal boost and the lagged impact of the Fed’s monetary tightening will push GDP growth below its 2% potential pace over the coming quarters.”
Investors also got a boost after Pinterest and Zoom Video Communications had successful initial public offerings. Zoom skyrocketed 72.2% while Pinterest shot up 28.4%.
However, Wall Street posted a muted weekly performance amid a sharp decline in the health-care sector. The Dow and Nasdaq rose 0.6% and 0.2% for the week, respectively, while the S&P 500 slipped 0.1%.
The health-care sector fell more than 4% this week as investors worry over proposals pushed by Democratic lawmakers. UnitedHealth CEO David Wichmann told analysts in a conference call earlier this week that propositions like “Medicare for All” would “jeopardize the relationship people have with their doctors, destabilize the nation’s health system and limit the ability of clinicians to practice medicine at their best.”
Shares of Regeneron Pharmaceuticals and HCA Healthcare led the decline in the sector this week, falling 13% and 9.9%, respectively. The decline within the sector has been broad based, however. Nearly 80% of health-care stocks were below their 50-day moving averages, according to Bespoke Investment Group. By comparison, 90% of tech stocks were above their 50-day averages.
