Specialists Robert Tuccillo, left, and Peter Mazza work on the floor of the New York Stock Exchange, Wednesday, July 18, 2018. Stocks are off to a mixed start as gains by industrial and financial companies are offset by energy and technology companies. (AP Photo/Richard Drew)

Big gains for industrials and banks take US stocks higher

July 18, 2018 - 2:54 pm

NEW YORK (AP) — U.S. stocks are edging higher Wednesday as financial and industrial companies including railroads and airlines climb after a round of strong second-quarter reports. United Continental and Berkshire Hathaway are making their biggest gains in years. Most other groups of stocks are lower, however. Household goods makers are returning a chunk of their recent gains and technology companies are lagging behind the rest of the market.

KEEPING SCORE: The S&P 500 index rose 4 points, or 0.2 percent, to 2,814 as of 2:40 p.m. Eastern time. The Dow Jones Industrial Average picked up 74 points, or 0.3 percent, to 25,194. The Nasdaq composite fell 2 points to 7,853. The Russell 2000 index of smaller-company stocks gained 1 point, or 0.1 percent, to 1,688.

GET MOVING: Transportation companies made powerful gains. United Continental surpassed Wall Street projections and said strong demand is resulting in higher prices as the summer travel season sets in. Its stock surged 8.4 percent to $78.73 and is on pace for its biggest gain in two years. Delta jumped 3.6 percent to $52.98 and American rose 3.4 percent to $38.66.

Railroad operator CSX said its profit climbed 72 percent in its latest quarter as it kept cutting costs and improving its operations. The results were stronger than analysts expected and the stock added 6.7 percent to $68.73. Other railroads also climbed, with Union Pacific gaining 2.3 percent to $141.47.

Maintenance supply company W.W. Grainger made the biggest gain on the S&P 500 after it blew past analysts' estimates in the latest quarter. The company posted strong growth in the U.S. with more business with both large and medium size customers and it raised its forecasts for the year. The stock jumped 10.1 percent to $335.72.

BERKSHIRE BOUNCE: Warren Buffett's Berkshire Hathaway conglomerate is on track for its biggest gain in almost seven years after it relaxed its rules on repurchasing stock. The company had $108 billion in cash and short-term investments as of March and investors hoped Berkshire would give some of that money back to shareholders by buying stock from them.

The company's Class B shares jumped 5 percent to $199.96 in heavy trading.

Other financial companies continued to post strong second-quarter results as they benefited from higher interest rates and lower tax bills. M&T Bank climbed 3.4 percent to $174.21 and wealth management firm Northern Trust advanced 3.5 percent to $109.41. Morgan Stanley rallied 2.4 percent to $50.37 after reporting big gains in trading and investment banking in the second quarter.

RECALCULATING: Texas Instruments fell 0.3 percent to $115.51 as CEO Brian Crutcher resigned after less than two months on the job. The chipmaker said Crutcher stepped down after the board determined he violated the company's code of conduct, but didn't explain what Crutcher did beyond saying the problem wasn't related to its operations or finances.

Company Chairman Rich Templeton was named CEO again. After 14 years in that job, he turned that role over to Crutcher June 1.

GOOGLING ANOTHER FINE: The European Union fined Google a record $5 billion Wednesday for using the market dominance of its Android mobile operating system to force handset makers to install Google apps, reducing choice for consumers. A year ago, EU regulators fined Google $2.8 billion for favoring its shopping listings in search results.

Shares of Alphabet, Google's parent company, edged higher. It picked up 0.3 percent to $1,216.57.

ENERGY: Benchmark U.S. crude recovered from an early loss and rose 1 percent to $68.76 a barrel in New York. Brent crude, used to price international oils, added 1 percent to settle at $72.90 a barrel in London. U.S. crude has tumbled 8 percent in July but is still up 42 percent over the last 12 months.

Wholesale gasoline climbed 0.9 percent to $2.04 a gallon. Heating oil gained 1 percent to $2.09 a gallon. Natural gas fell 0.7 percent to $2.72 per 1,000 cubic feet.

ABBOTT ADVANCING: Abbott rose 2.7 percent to $64.47 after the maker of infant formula, medical devices and drugs posted beat Wall Street forecasts in the second quarter.

BONDS: Bond prices ticked lower. The yield on the 10-year Treasury note rose to 2.87 percent from 2.86 percent.

METALS: Gold was little changed and closed at $1,227.90 an ounce. Silver fell 0.3 percent to $15.57 an ounce. Copper rose 0.5 percent to $2.76 a pound.

OVERSEAS: Germany's DAX added 0.8 percent and the British FTSE 100 rose 0.7 percent. The CAC 40 in France gained 0.5 percent.

Japan's benchmark Nikkei 225 gained 0.4 percent and the Kospi in South Korea lost 0.3 percent as the country's government downgraded its forecasts for job creation and growth. Hong Kong's Hang Seng shed 0.2 percent.

CURRENCIES: The dollar remained at 112.83 yen. The euro fell to $1.1648 from $1.1664.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jay

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