Major U.S. stock indexes edged mostly higher in midday trading Wednesday as gains in financial companies outweighed losses elsewhere in the market. Bond yields climbed to the highest level in four months, sending bank shares higher and weighing on utilities and other high-dividend payers. Energy stocks rose along with crude oil prices. Homebuilders declined following a mixed batch of housing data. Technology companies lagged the most.
KEEPING SCORE: The S&P 500 index rose 5 points, or 0.2 percent, to 2,909 as of 12:10 p.m. Eastern Time. The Dow Jones Industrial Average gained 197 points, or 0.8 percent, to 26,444. The Nasdaq composite lost 15 points, or 0.2 percent, to 7,940. The Russell 2000 index of smaller companies gave up 1 point, or 0.1 percent, to 1,709. Decliners were edging out gainers on the New York Stock Exchange.
BOND YIELDS CLIMB: Bond prices fell. The yield on the 10-year Treasury rose to 3.07 percent from 3.04 percent late Tuesday. That’s the highest level since May 22, when the yield hit 3.08 percent.
Higher yields force interest rates on mortgages and other loans higher, making it more profitable for banks to lend money. The higher bond yields drove up shares in banks and other financial stocks. Prudential Financial rose 2.7 percent to $102.95.
THE QUOTE: The surge in bond yields reflects the belief on the part of many investors that the economy is strengthening, noted Craig Birk, chief investment officer at Personal Capital.
“If the economy continues to move forward then interest rates have more room to creep higher and the Fed has more room to continue raising (short-term rates),” he said.
BREAKING GROUND: The Commerce Department said residential construction rebounded in August at the fastest pace in seven months. However, applications for new building permits, considered a good indication of future activity, plunged. Homebuilder shares slumped, giving up early gains. William Lyon Homes was down 1 percent to $19.11.
DRIVER OUT: AutoNation rose 1.7 percent to $43.84 on news that CEO Mike Jackson is stepping down after almost two decades leading the nation’s largest auto dealership chain.
FIT FOR GROWTH: Fitbit shares gained 3.5 percent to $6.01 after the maker of wearable exercise trackers launched a platform that offers personalized coaching. The company also announced a partnership with Humana to potentially give the insurer’s 5 million members access to the platform.
ALMOST THERE: Praxair climbed 4.5 percent to $165.36 on news reports that the industrial gases company is moving closer to U.S. antitrust approval of its merger with Germany’s Linde.
TECH STUMBLE: Technology stocks, which powered solid gains for the market on Monday, declined Tuesday. Advanced Micro Devices lost 1.6 percent to $31.43.
ROAD HAZARD: Copart slumped 17 percent to $53.29 after the operator of online vehicle auctions reported earnings that fell short of analysts’ estimates.
ENERGY: Benchmark U.S. crude rose 1.4 percent to $70.79 a barrel in New York. Brent crude, used to price international oils, gained 0.2 percent to $79.19 a barrel in London.
Energy companies climbed along with oil prices. Newfield Exploration gained 3 percent to $28.53.
CURRENCIES: The dollar fell to 112.24 yen from 112.35 yen on Tuesday. The euro strengthened to $1.1685 from $1.1667.
MARKETS OVERSEAS: In Europe, Germany’s DAX gained 0.5 percent, while France’s CAC 40 rose 0.6 percent. Britain’s FTSE 100 added 0.4 percent. Major indexes in Asia finished mostly higher. Japan’s benchmark Nikkei 225 added 1.1 percent, while Australia’s S&P/ASX 200 gained 0.5 percent. Hong Kong’s Hang Seng rose 1.2 percent. South Korea’s Kospi finished virtually unchanged.