Stock market ekes out small gains
NEW YORK, USA — MAJOR stock indexes eked out small gains yesterday after an upturn in technology companies outweighed weakness in other parts of the market, including a drop in airlines.
The gain in technology stocks was driven by Apple. The technology company surged after billionaire investor Carl Icahn said on Twitter that he held a large position in Apple and that its stock was undervalued.
August is shaping up to be a lacklustre month for the stock market as major indexes fail to add significantly to the gains they made in July. The Standard & Poor’s 500 index has drifted lower, fluctuating between small losses and gains, since closing at an all-time high August 2.
A sharp rise in Treasury yields also rippled through the stock market yesterday.
The yield on the 10-year note climbed to 2.72 per cent, close to its highest in two years, on the latest signs that Europe is emerging from its recession. Industrial production in the 17 countries that use the euro rose in June and investor confidence increased in Germany, the region’s biggest economy.
The sharp rise in yields lifted financial companies because higher interest rates could help them generate better profit margins. That helped offset declines in homebuilders and other stocks that are sensitive to rising borrowing costs.
The yield is also climbing on speculation that the Federal Reserve will cut its stimulus as the economy recovers. Atlanta Fed President Dennis Lockhart yesterday said that it was too early to say when the bank would ease back on its stimulus, but hinted that it would likely happen before the end of the year.