NEW YORK (AP) — U.S. stocks are recovering to make modest gains Wednesday afternoon as drug and consumer companies trade higher. Investors snap up bonds, keeping yields on long-term Treasury notes near all-time lows. The prices of gold and silver, which are around two-year highs, rose further.
KEEPING SCORE: The Dow Jones industrial average rose 30 points, or 0.2 percent, to 17,870 as of 12:45 p.m. Eastern time. The Standard & Poor’s 500 index added 5 points, or 0.3 percent, to 2,094. The Nasdaq composite gained 29 points, or 0.6 percent, to 4,852.
HEALTH CARE: Drugmakers AbbVie and Biogen led health care stocks higher. The two companies said that regulators in the European Union approved their drug Zinbryta, a treatment for multiple sclerosis that can be take just once a month. AbbVie stock rose $1.58, or 2.6 percent, to $63.50 and Biogen gained $4.21, or 1.7 percent, to $246.24.
OUT OF THE QUEUE: Netflix stock fell after a Jefferies & Co. analyst said its U.S. subscriber growth may be slower than expected. John Janedis also said competition is increasing for Netflix. He downgraded the stock to “Underperform” from “Hold” and cut his price target to $80 per share from $120. Netflix lost $3.21, or 3.3 percent, to $94.70.
Other consumer stocks traded higher, however. Online retailer Amazon rose $8.50, or 1.2 percent, to $736.60 and used car dealership CarMax gained $2.18, or 4.6 percent, to $49.94.
BONDS: Bond yields inched higher, but remained close to all-time lows as investors seek safety following Britain’s vote to leave the European Union. The demand is keeping bond prices high and yields low. The yield on the 10-year Treasury note rose to 1.39 percent from 1.38 percent late Tuesday. The yield on the 30-year Treasury bond remained at 2.15 percent. According to Tradeweb, both yields set all-time lows earlier on Wednesday, reaching 1.32 percent and 2.10 percent, respectively.
Bond yields have tumbled over the last few months following a weak U.S. jobs report and then unexpected result of the British referendum. While the yields on U.S. bonds have fallen, they remain higher than yields from other advanced economies, and the U.S. economy appears to be in better shape.
HANGING UP: Phone company stocks took the biggest losses. Considered a safe investment, they are the best-performing sector on the S&P 500 over the last month, and AT&T and Verizon are both trading at long-time highs. Frontier Communications gave up 7 cents, or 1.4 percent, to $4.91. Verizon slipped 17 cents to $55.80.
MELROSE’S PLACE: Nortek, which makes heating and ventilation systems for buildings, agreed to be acquired by Melrose Industries PLC for $86 per share, or $1.4 billion. Nortek stock jumped $24.55, or 39.3 percent, to $87.04.
GOLDEN: The price of gold rose $8.40 to $1,367.10 an ounce and silver gained 21 cents, or 1.1 percent, to $20.12 an ounce. Gold is trading at its highest price since March 2014 while silver is at its highest price since August of that year. Newmont Mining gained 71 cents, or 1.8 percent, to $41.09 and Harmony Gold rose 17 cents, or 4.1 percent, to $4.27.
ENERGY: Oil prices edged higher. Benchmark U.S. crude picked up 46 cents, or 1 percent, to $47.06 a barrel in New York. Brent crude, used to price international oils, added 35 cents to $48.31 a barrel in London.
Gas prices lagged, however, after the U.S. government said stockpiles of gasoline jumped last week. The Energy Information Administration said stockpiles rose by 1.4 million barrels. That was a surprise to analysts, as Platts says they expected gasoline stockpiles to fall by 900,000 barrels.
The price of wholesale gasoline remained at $1.43 a gallon. Marathon Petroleum fell $2.19, or 5.6 percent, to $36.59 and Valero Energy fell $1.67, or 3.4 percent, to $48.17. Phillips 66 slumped $2.12, or 2.7 percent, to $75.82.
GROUNDED: United Continental and American Airlines fell after Credit Suisse downgraded the two airlines. Analyst Julie Yates said she expects disappointing earnings and revenue from the companies, and said the stocks won’t bring in strong returns until the global economy gets stronger or the two airlines cut back on capacity. United gave up $1.22, or 4.2 percent, to $27.71 and American lost $1.41, or 3.5 percent, to $38.88.
CURRENCIES: The British pound continued to weaken. It’s at its lowest in more than 30 year and fell to $1.2944 from $1.3032 Wednesday. The dollar slipped to 101.41 yen from 101.55 yen on Tuesday. The euro rose to $1.1087 from $1.1075.
OVERSEAS: France’s CAC lost 1.9 percent and Germany’s DAX shed 1.7 percent while Britain’s FTSE 100 fell 1.2 percent. Tokyo’s Nikkei 225 and South Korea’s Kospi each skidded 1.9 percent. Hong Kong’s Hang Seng index slid 1.2 percent.