(Reuters) – The Dow Industrials crossed 27,000 points for the first time and the S&P 500 was near record highs on Thursday, lifted by technology and healthcare stocks and raised bets of an interest rate cut following Fed chief Jerome Powell’s dovish remarks.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., July 1, 2019. REUTERS/Brendan McDermid
Shares of health insurers including Cigna Corp (CI.N) and UnitedHealth Group Inc (UNH.N) jumped 13.74% and 4.74%, while drug distributors such as McKesson Corp (MCK.N) rose 3.85% after the Trump administration withdrew a rule aimed at eliminating drug rebates from its Medicare health plans.
The healthcare index .SPXHC, which is the worst performing S&P sector this year, rose 0.29%.
Powell, who began his second day of testimony before the Congress, had said that the central bank stood ready to “act as appropriate” to support record U.S. economic growth.
“Is the chief of money going to stave off real weak growth or recession or is it an insurance policy cut move?” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “If latter, the market can continue its rally. If not, we are going to have an earnings problem.”
At 9:54 a.m. ET, the Dow Jones Industrial Average .DJI was up 135.16 points, or 0.50%, at 26,995.36. The S&P 500 .SPX was up 6.97 points, or 0.23%, at 3,000.04, and the Nasdaq Composite .IXIC was up 12.56 points, or 0.15%, at 8,215.09.
Technology .SPLRCT stocks rose 0.30%, providing a major boost to the three main indexes.
Delta Air Lines Inc (DAL.N) rose 1% after reporting a 39.3% rise in quarterly profit, as the carrier benefited from higher fares and flying fuller planes. This comes a day after American Airlines Group Inc (AAL.O) raised its estimate for second-quarter unit revenue. The S&P 1500 airlines index .SPCOMALI rose 0.37%.
A Labor Department report showed U.S. underlying consumer prices increased by the most in nearly 1-1/2 years in June, but that was unlikely to change expectations the Fed would cut rates this month.
Advancing issues outnumbered decliners by a 1.33-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.01-to-1 ratio on the Nasdaq.
The S&P index recorded 24 new 52-week highs and three new lows, while the Nasdaq recorded 45 new highs and 12 new lows.
Reporting by Medha Singh and Manas Mishra in Bengaluru; Editing by Sriraj Kalluvila