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Technology, health care stocks jump as indexes rise

Trader Robert Oswald works on the floor of

Trader Robert Oswald works on the floor of the NYSE, Thursday, Jan. 25, 2018. Credit: AP

Stocks are rising Friday morning as technology and health care companies make more gains. Chipmaker Intel and drugmaker AbbVie are jumping after they did far better than analysts expected in the fourth quarter. Bond prices fell, sending yields higher.

KEEPING SCORE: The Standard & Poor’s 500 index climbed 12 points, or 0.4 percent, to 2,851 as of 10:10 a.m. The Dow Jones industrial average added 87 points, or 0.3 percent, to 26,476. The Nasdaq composite rose 39 points, or 0.5 percent, to 7,450. The Russell 2000 index of smaller-company stocks gained 3 points, or 0.2 percent, to 1,604.

The S&P 500 is on track to rise for the fourth week in a row, marking its eighth weekly gain out of the last nine. It is also on track for its largest monthly increase in almost two years. It has been more than a year and a half since the index went through a decline of 5 percent. That’s the longest streak in its history, although investors say they are starting to see signs of increased volatility.

U.S. GROWTH: In its first of three estimates, the Commerce Department said the U.S. economy grew 2.6 percent in the fourth quarter. That’s a solid result, but after 3 percent growth in the two quarters before it and reports of strong holiday sales in recent weeks, investors were hoping for more. The economy grew 2.3 percent in 2017, better than the year before but about the same as its overall average since the end of the Great Recession. Experts think growth will speed up this year, partly because of the tax cut package signed into law in December.

CHIPS AHOY: Intel jumped after it posted strong results for the fourth quarter and forecast $65 billion in revenue this year, more than analysts expected. The company said its data center business did well at the end of 2017 and recently-discovered flaws in many of its processors aren’t affecting its sales, a possibility that had worried investors. Intel said new processors that address those flaws will be on the market later this year. The stock added $3.71, or 8.2 percent, to $49.02. Other chipmakers also traded higher after struggling over the last few days.

Cloud computing company VMware jumped $10.12, or 7.4 percent, to $147.75 after The Wall Street Journal reported that Dell is interested in taking full control of the company.

HEALTHY GAINS: Drugmaker AbbVie posted a better-than-expected profit and greater sales. Its revenue from Humira, an inflammatory disease treatment that is the world’s biggest-selling drug by revenue, climbed 14 percent. AbbVie’s profit forecast for 2018 was far better than analysts expected. The stock jumped $9.45, or 8.7 percent, to $117.75. Biogen rose $13.43, or 3.8 percent, to $367.17 and Gilead Sciences picked up $3.44, or 4.2 percent, to $84.63.

WEAK BREW: Starbucks skidded $2.93, or 4.8 percent, to $57.62 after it posted weaker growth than investors had hoped. Analysts were unhappy with its results outside the U.S., and Starbucks also sales of holiday merchandise were weak.

DAVOS: Investors had little early reaction to President Donald Trump’s speech at the World Economic Forum in Davos. He told the group that leaders should prioritize their own countries, but that his administration isn’t opposed to international cooperation and that continued growth for the U.S. economy is good for the rest of the world. Comments from Trump as well as Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross have contributed to swings in stock prices and the dollar over the last few days as investors assessed how the administration will implement its views on trade and the U.S. dollar.

DOLLAR DOWN: The dollar declined further against other currencies. It fell to 108.71 yen from 109.41 yen. The euro rose to $1.2439 from $1.2391. The ICE US dollar index is at three-year lows and has declined for six weeks in a row. It made a small rebound late Thursday after Trump and Mnuchin said they believe in a stronger dollar, which cut against comments from Mnuchin earlier this week when he noted that a weaker dollar helps U.S. exporters.

BONDS: Bond prices fell. The yield on the 10-year Treasury note rose to 2.65 percent from 2.62 percent.

OIL: Benchmark U.S. crude rose 32 cents to $65.83 a barrel in New York. Brent crude, used to price international oils, dropped 13 cents to $70.29 per barrel in London.

OVERSEAS: The CAC 40 in France jumped 0.9 percent while the German DAX gained 0.3 percent. The FTSE 100 in Britain rose 0.5 percent. Japan’s Nikkei 225 slipped 0.2 percent and South Korea’s Kospi rose 0.5 percent. Hong Kong’s Hang Seng index jumped 1.5 percent.

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