US stocks ended higher for the second straight session on Thursday, led by small-cap stocks, while the Nasdaq climbed on a rally in biotech shares.
The surge in biotech stocks extended the recent trend of volatile trading. Small-caps and the so-called momentum names in the Internet and biotech spaces have recently echoed the broader market's direction, but moved in an outsized fashion, often without specific news.
Among momentum names, noted for high growth and perceptions of excessive valuation, Vertex Pharmaceuticals shares shot up 6 per cent to $71.18, while Alexion Pharmaceuticals rose 2.5 per cent to $160.48. The Nasdaq biotechnology index gained 1.9 per cent. Shares of Salesforce.com, the world's biggest maker of online sales software, advanced 6.1 per cent to $53.27.
The Russell 2000 index of small-cap shares rose 0.9 per cent, outperforming the broader S&P 500. The Russell fell into correction territory last week - defined as a 10 per cent decline from a recent closing high - but has since retraced some of that, and is now less than 8 per cent from its peak.
"Small-caps and momentum names are doing good today, but we really need another solid gain in the overall market for those high growth-oriented, high-risk stocks" to move away from the day-to-day volatile trading, said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.
Hewlett-Packard Co posted a bigger-than-expected drop of 1 per cent in quarterly revenue as it struggled to maintain its grip on a shrinking personal computer market while protecting profit margins. The stock reversed earlier gains to end down 2.3 per cent at $31.78.
Housing stocks ranked among the market's biggest outperformers, with the housing index up 1.2 per cent after existing home sales rebounded in April. Homebuilders were among the S&P 500's biggest gainers, with D.R. Horton Inc up 2.4 per cent at $22.65 and PulteGroup Inc up 2.2 per cent at $19.22.
The Dow Jones industrial average rose 10.02 points or 0.06 per cent, to end at 16,543.08. The S&P 500 gained 4.46 points or 0.24 per cent, to 1,892.49. The Nasdaq Composite added 22.81 points or 0.55 per cent, to close at 4,154.34.
The S&P 500 is about 10 points away from its record intraday high set on May 13. For the past week, the index has been caught between the high and its 50-day moving average as data left investors unsure about the pace of the economic recovery.
Shares of JD.Com soared in their market debut on Thursday, jumping 10 percent to close at $20.90 after the Chinese e-commerce company raised $1.78 billion in an initial public offering.
Best Buy Co rose 3.4 per cent to $26.22. The electronics retailer reported first-quarter earnings that topped expectations and domestic comparable-store sales that fell more than expected.
US existing home sales rose in April and the supply of properties on the market hit the highest level since August 2012, hopeful signs for the housing market's stalled recovery.
About 5.1 billion shares traded on all US platforms, according to BATS exchange data, below the month-to-date average of 5.9 billion.
Copyright: Thomson Reuters 2014