U.S. indexes hit one-month highs as tech stocks rally

Marley Jay, The Associated Press</span>
Published Monday, January 14, 2019 11:39PM EST
Last Updated Tuesday, January 15, 2019 1:57PM EST

NEW YORK -- Stock indexes in the U.S. are rising to their highest levels in a month Tuesday as Netflix leads a rally in internet and technology companies after saying it will raise prices for its subscription plans in the U.S. China's also government said it plans to cut taxes, a step that could generate more business for tech companies.

Health care companies and banks rose as major companies including UnitedHealth and JPMorgan Chase announced their fourth-quarter results.

The British pound is weakening as U.K. legislators prepare to vote on Prime Minister Theresa May's plan detailing the country's departure from the European Union. The proposal appears likely to be rejected.

KEEPING SCORE: The S&P 500 index rose 25 points, or 1 per cent, to 2,608 at 12:45 p.m. Eastern time. It hasn't closed above 2,600 since Dec. 13. The Dow Jones Industrial Average added 147 points, or 0.6 per cent, to 24,057. The technology-heavy Nasdaq composite jumped 110 points, or 1.6 per cent, to 7,016. The Russell 2000 index of smaller-company stocks gained 7 points, or 0.5 per cent, to 1,439.

BANDER-SNATCHING MORE DOLLARS: Netflix announced the biggest price increase in its history. The price of its most popular video-streaming plan will rise $13 per month from $11. That will help to pay for Netflix's huge investment in original shows and films and finance the heavy debt it has assumed to ward off rivals such as Amazon, Disney and AT&T. Its stock climbed 6.8 per cent to $355.59. Netflix stock has jumped 33 per cent in 2019 but was worth almost $420 a share in July.

Elsewhere, Facebook gained 3 per cent to $149.70 and Alphabet, Google's parent company, picked up 3.1 per cent to $1,083.

BRITAIN VOTE: British lawmakers will begin their vote Tuesday afternoon. It still appears the plan will be voted down. Lawmakers who want Britain to leave the EU say the deal will leave Britain bound indefinitely to EU rules, while pro-EU politicians favour an even closer economic relationship with the bloc than the one May and European leaders negotiated.

If the deal is defeated, it's not clear what will happen to May's government or the economies and financial systems of Britain and the rest of Europe. Britain is scheduled to leave the EU on March 29.

The pound dropped to $1.2730 from $1.2865, and the British FTSE 100 index closed up 0.6 per cent. It's down 11 per cent over the last year.

British banks mostly fell. Barclays lost 1.5 per cent to $8.14 and Lloyd's shed 1.7 per cent to $2.81.

CHINA'S ECONOMY: Chinese leaders plan to slash taxes, increase government spending, and provide financing to private and small enterprises in a bid to strengthen the world's second-largest economy. China is enduring its worst slowdown since the global financial crisis amid a punishing tariffs dispute with the U.S.

That helped tech companies, which make big chunks of their sales in China. Microsoft rose 2.7 per cent to $104.79 and Broadcom climbed 2.8 per cent to $257.97.

Hong Kong's Hang Seng rebounded 2 per cent, wiping out a loss on Monday. It's moved higher this month but is still down almost 19 per cent from its peak in late January 2018.

Japan's Nikkei 225 index, reopening after a market holiday, added 1 per cent. The Kospi in South Korea jumped 1.6 per cent.

PAINT IT BLACK: Paint and coatings maker Sherwin-Williams said it was "disappointed" with its sales in October and November, and its profit and sales in the fourth quarter fell short of Wall Street's estimates. Its stock fell 4.4 per cent to $380.33. Other coatings makers also struggled, as PPG Industries skidded 1 per cent to $100.92. Home improvement retailer Home Depot gave up 0.8 per cent to $177.41 and Lowe's slid 1.6 per cent to $95.34.

AIR SICK: Delta Air Lines became one of the first companies to detail how the partial shutdown of the federal government is affect its business. The airline says it's on pace to lose $25 million in revenue this month. CEO Ed Bastian said the shutdown is keeping Delta from using new Airbus jets because the planes must be certified by safety regulators. They have been furloughed since Dec. 22 in the longest U.S. government shutdown ever.

An unusually high number of airport screeners have been missing work after they did not get paychecks last week, contributing to long lines at some airports.

Delta stock gyrated and was up 0.1 per cent at $47.81 in afternoon trading.

HEALTH CARE GETS A CHECKUP: UnitedHealth rose 3.1 per cent to $255.66 after saying its Optum pharmacy benefits management business had another strong quarter. United is the largest health insurer in the U.S. and the first to report its results, so it's often seen as a bellwether for the industry.

Boston Scientific and Edwards ended a lawsuit over patents that cover products including replacement heart valves and valve repair devices. Edwards paid Boston Scientific $180 million. Edwards jumped 7.6 per cent to $160.87 and Boston Scientific gained 3.7 per cent to $36.62.

ENERGY: Oil prices rose as investors felt a bit better about China's economic growth. Benchmark U.S. crude added 2.7 per cent to $51.86 a barrel in New York. The international standard, Brent crude, gained 2.1 per cent to $60.22 a barrel in London.

BONDS: Bond prices were little changed after an early gain. The yield on the 10-year Treasury remained at 2.71 per cent.

EUROPE: Germany's DAX edged 0.3 per cent higher and the CAC 40 in France picked up 0.5 per cent.

CURRENCIES: The dollar rose to 108.63 yen from 108.20 yen. The euro dipped to $1.1387 from $1.1465.

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Annabelle Liang contributed from Singapore

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