Stocks rose as health care led and the Dow outpaced tech: Thursday recap

Stocks finished higher Thursday, with the gains spread widely across the market rather than concentrated in the biggest technology names. The Dow Jones Industrial Average rose 1.08% to close at 52,177.69, the strongest of the three major averages. The S&P 500 added 0.33% to 7,744.06. The Nasdaq Composite, weighed down by its heavier exposure to technology, edged up just 0.08% to 26,713.03. The split told the story.

Under the surface, money leaned toward the steadier and more cyclical corners of the market. Health care led the eleven S&P 500 sectors, up 1.86%. Materials rose 1.79% and consumer discretionary 1.71%, with communication services and financials close behind at 1.46% and 1.38%. The laggards sat at the other end. Energy was the weakest group, down 1.58%, and technology slipped 0.65%. The gap between the best and worst group was close to three and a half points. Eight of the eleven groups advanced.

The session’s headline came from two government reports. The Labor Department said its producer price index rose 1.3% in September, far above the roughly 0.5% gain economists had expected and one of the sharpest monthly readings on record. Core producer prices, which strip out food and energy, climbed 0.7% on the month. Energy did much of the work at the wholesale level, with gasoline prices climbing steeply. Separately, the Commerce Department reported that retail sales rose 0.8% in September, more than double the 0.3% forecast and a sign that household spending held up as the quarter closed. That strength was uneven. Gasoline stations accounted for much of the headline gain, and sales excluding them rose a milder 0.2%. Hotter wholesale inflation would normally press stocks and lift bond yields. This time the reaction ran the other way. The ten-year Treasury yield eased to 5.21%, and buyers rotated into health care and other groups that had lagged during the long run in technology. Chip stocks stayed under pressure. The weakness there is now weeks old.

The week’s pattern helps frame the day. Over the past five sessions the fund tracking the Nasdaq-100 has fallen 2.62% and the technology sector fund 4.34%, while the Dow’s tracking fund has climbed 1.86%. Thursday pushed that rotation a step further, lifting the groups that had been left behind.

Breadth backed the advance. The small-cap Russell 2000, through its tracking fund, rose 1.37%, outpacing the large-cap benchmarks and showing that the buying reached well beyond the market’s biggest names. The Dow’s advance ran to 556 points, and the session’s character sat in the rotation beneath that number, as money moved toward groups left behind in the recent technology run. The Cboe Volatility Index, Wall Street’s gauge of expected swings, fell 2.43% to 16.46. That is a calm reading. For a day that opened with an inflation surprise, the tape stayed notably orderly.

More Federal Reserve speakers are on the calendar in the days ahead, along with a reading on industrial production, and earnings season widens from here as more large companies report. The inflation question stays open. Investors will weigh each release as it lands.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.