NEW YORK: Wall Street’s main indexes rose slightly on Wednesday as cooler-than-expected producer inflation data and upbeat corporate earnings lifted sentiment, but a selloff in chip stocks limited gains.
PayPal jumped nearly 14 percent after sources told Reuters payments company Stripe and private equity firm Advent International have offered to acquire it for USD60.50 per share — around a 28 percent premium to the stock’s Tuesday close.
Financial firms helped set a positive tone for the second-quarter earnings season for a second straight day. The S&P 500 financial sector gained 1.1 percent.
BlackRock shares advanced 7.3 percent, after the asset manager beat profit expectations. Morgan Stanley, however, slipped 1 percent despite reporting a stronger-than-expected quarterly profit.
“Banks have rallied to record highs this month as improving fundamentals and a broadening in market leadership beyond technology have provided a powerful tailwind,” said Adam Turnquist, chief technical strategist at LPL Financial.
“Second-quarter earnings from the major money center banks reinforced the constructive outlook.”
Still, weakness in semiconductor shares weighed on S&P 500 and Nasdaq. The Philadelphia SE Semiconductor index fell 2.9 percent to a one-week low, reversing some of its gains from earlier in the week.
The S&P 500 technology sector lost 0.8 percent. Strength in mega cap stocks offered some support, with Apple leading gains among the “Magnificent Seven” and rising 3.6 percent.
The earnings season is gathering pace at a crucial point for equities. The S&P 500 has climbed more than 10 percent this year and is within striking distance of its June record close, leaving the rally vulnerable to any disappointment in corporate results.
Wednesday also marked the second day of Fed Chair Kevin Warsh’s testimony before Congress. Warsh told lawmakers the Fed was not meeting its price stability mandate, but offered little guidance on the policy path ahead, saying options included a rate hike, a hold or a cut.
At 11:51 a.m. ET the Dow Jones Industrial Average rose 142.98 points, or 0.27 percent, to 52,651.25, the S&P 500 gained 5.50 points, or 0.07 percent, to 7,549.09 and the Nasdaq Composite gained 53.06 points, or 0.20 percent, to 26,160.07.
Advancing issues outnumbered decliners by a 1.91-to-1 ratio on the NYSE and by a 1.51-to-1 ratio on the Nasdaq.
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