Stocks soar, led by gains in technology

Stocks rose sharply on Wall Street Wednesday, pushing the Standard & Poor's 500 index and Dow Jones industrial average to record highs. Technology stocks surged after network communication company Adtran reported earnings that were double what Wall Street analysts expected.

Richard Drew/AP
Trader Peter Tuchman works on the floor of the New York Stock Exchange Wednesday. Stocks closed higher on Wall Street, led by a surge in technology stocks.

Technology stocks roared back Wednesday, driving the Standard & Poor's 500 and Dow Jones industrial average to record highs.

The industry has lagged the broader market this year, but surged after network communication company Adtran reported earnings that were double what Wall Street analysts expected. That boosted optimism that businesses will increase spending on technology equipment.

Chipmakers Micron and Intel jumped, as did other network equipment makers like Cisco and JDS Uniphase.Stocks were also up on an optimistic reading of the Federal Reserve Bank's latest minutes.

The Dow and S&P 500 both closed at all-time highs. Technology stocks rose 1.8 percent, the most of the 10 industry groups in the S&P. That's a big change from tech's weak performance this year. The group is up just 4.7 percent, trailing the S&P's gain of 11.3 percent.

The stock market is reversing course from last week, when investors' confidence fell because of an unexpectedly poor report on the U.S. job market and other signs that the economy slowed in March.

The Dow Jones industrial average jumped 128.78 points, or 0.9 percent, to 14,802.24. It was the third straight gain for the blue-chip index and its biggest one-day rise in a month. The Dow surged in the first three months of the year and is still up 13 percent in 2013.

The Nasdaq composite, which is heavily weighted with technology stocks, had the biggest percentage gain of the three main indexes Wednesday, rising 59.39 points, or 1.8 percent, to 3,297.25 The S&P rose 19.12 points, or 1.2 percent, to 1,587.73.

Investors are seeing positive news in the minutes from the Federal Reserve's latest meeting, which were released Wednesday. The minutes revealed that policy makers are becoming more confident that the U.S. economy can grow without the help of the bank's stimulus program, said Brian Gendreau, a market strategist at Cetera Financial Group.

Many Fed members indicated they want to slow and eventually end the central bank's bond-buying program before the end of the year, as long as the job market and economy show sustained improvement. The $85 billion in monthly bond purchases has kept interest rates extremely low, with the goal of encouraging borrowing and spending.

"The idea that the Fed thinks that we are closer to the restoration of normality might be positive for the market," said Gendreau.

Among stocks making big moves, Facebook rose 98 cents, or 3.7 percent, to $27.57 after General Motors said it would start running ads on the social network site. Adtran rose $2.75, or 14 percent, to $22.46, and JDS Uniphase rose 64 cents, or 4.8 percent, to $13.98.

Hospital stocks fell heavily after Deutsche Bank lowered its recommendation on the companies because their prices have risen so much that they no longer offer good value. Private hospitals have surged over the past year in anticipation that health care spending will increase following the introduction of Obama's health care plan.

Health Management Associates plunged $2.06, or 16 percent, to $10.53. Tenet Healthcare fell $2.38, or 5.5 percent, to $41.14 and Community Health Systems dropped $1.65, or 3.8 percent, to $42.26.

Bond yields fell as investors moved money out of safe haven U.S. government debt and into riskier assets. The yield on the 10-year Treasury note rose to 1.81 percent from 1.75 percent late Tuesday.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.