NEW YORK (AP) — U.S. stocks are rallying Wednesday, keeping major indexes at record highs. Bond yields are falling, and investors seeking income are buying stocks that pay large dividends, like real estate investment trusts. Stocks that do better in times of faster economic growth, like technology companies, are also climbing. Health care companies are taking steep losses after President-elect Donald Trump said he wants to reduce drug prices.
KEEPING SCORE: The Dow Jones industrial average added 178 points, or 0.9 percent, to 19,431 as of 1:30 p.m. Eastern time. The Standard & Poor’s 500 index picked up 15 points, or 0.7 percent, to 2,227. The Nasdaq composite recovered from an early loss to rise 26 points, or 0.5 percent, to 5,358, and remains below its all-time high. Sharp drops in big biotechnology companies like Celgene were holding back the Nasdaq’s gains.
RECORD RECAP: The Dow closed at a record high on Tuesday. So did the Russell 2000, an index of smaller companies. The Russell recovered from an early loss to gain 9 points, or 0.6 percent. The S&P 500 set its latest record on Nov. 25.
BONDS: U.S. government bond prices rose, sending yields lower. The yield on the 10-year Treasury note fell to 2.34 percent from 2.39 percent. Bond yields have risen sharply this year but have slipped in the last few days. That’s helped stocks that are seen as bond substitutes, like real estate investment trusts. Their big dividends are attractive to investors who want income, so when bond yields fall, investors often turn to those stocks. Industrial real estate company Prologis rose $1.31, or 2.6 percent, to $52.01 and electricity and natural gas company Exelon added 43 cents, or 1.3 percent, to $33.48.
LEADERS: Companies that stand to benefit from faster economic growth also climbed. Home improvement retailer Lowe’s rose $2.59, or 3.6 percent, to $75.05 and Nike gained 95 cents, or 1.9 percent, to $51.52. Technology companies also outperformed the market. IBM rose $2.49, or 1.6 percent, to $162.84 and HP added 35 cents, or 2.2 percent, to $15.95.
WILD WESTERN: Hard drive maker Western Digital climbed $4.83, or 7.6 percent, to $68.68 after it extended a patient licensing deal with Samsung. The new deal will last until the end of 2024. Western Digital raised its revenue outlook after making the announcement.
TRUMP THUMPS HEALTH STOCKS: In an interview with Time magazine, which named him Person of the Year, the president-elect said he wants to reduce drug prices. He did not say how his administration plans to do that. Democratic nominee Hillary Clinton campaigned on reducing drug prices, and drug company stocks had rallied since the election as investors felt that was less likely to happen under Trump.
The Nasdaq biotechnology index tumbled 3.1 percent, as those companies make costly medications and might stand to lose the most under tighter price regulations. Elsewhere, Pfizer gave up 66 cents, or 2.1 percent, to $30.90 and Johnson & Johnson fell $1.89, or 1.7 percent, to $110.17. Drug distributor McKesson sank $3.93, or 2.7 percent, to $141.47. Companies that make medical device and equipment also slid.
GAME ON: Dave & Buster’s Entertainment, which owns a chain of restaurants and arcades, reported a bigger profit and higher sales than analysts had expected. The company also raised its forecasts for the year. Its stock jumped $8.25, or 17.2 percent, to $56.25.
STEEL DEAL: AK Steel said it will raise base prices for all of its stainless steel products starting Jan. 1. The company’s stock gained 49 cents, or 4.6 percent, to $11.04. U.S. Steel rose $2.03 ,or 5.6 percent, to $37.98.
BAGGED: Handbag and accessories maker Vera Bradley sank after it posted weak results and issued a disappointing outlook for the current quarter. Its stock shed $1.04, or 7.12percent, to $13.63.
ENERGY: Benchmark U.S. crude lost 68 cents, or 1.3 percent, to $50.25 a barrel in New York. Brent crude, the international standard, slid 48 cents to $53.45 a barrel in London.
EUROPE STIMULUS: European stock indexes jumped as investors anticipated that the European Central Bank will extend its bond-buying stimulus program Thursday. The stimulus is designed to boost growth and inflation. European stock indexes climbed. Germany’s DAX gained 2 percent and the FTSE 100 in Britain rose 1.8 percent. The CAC 40 of France picked up 1.4 percent.
CURRENCIES: The dollar slipped to 113.71 yen from 114.05 yen. The euro rose to $1.0753 from $1.0715.
ASIAN MARKETS: Japan’s benchmark Nikkei 225 rose 0.7 percent and the South Korean Kospi inched up 0.1 percent. The Hang Seng in Hong Kong gained 0.5 percent.