BUSINESS

Stocks close higher, lifted by energy and technology companies

U.S. stocks rose Thursday as the price of oil climbed for the third day in a row while key oil-producing nations discussed cuts in production. Tech and consumer stocks traded higher, led by Amazon and PayPal, while drugmakers fell.

Facebook made its biggest leap in 2½ years after it said its profit more than doubled in the fourth quarter compared to a year earlier. The social network finished 2015 with almost 1.6 billion users. Sports apparel maker Under Armour also surged. Energy prices rose as OPEC and Russia discussed production cuts.

The Dow Jones industrial average climbed 125.18 points, or 0.8%, to 16,069.64. The Standard & Poor's 500 index rose 10.41 points, or 0.6%, to 1,893.36. The Nasdaq composite index rose 38.51 points, or 0.9%, to 4,506.68.

Stocks switched between small gains and losses throughout the morning. In the afternoon they gradually traded higher but never went as high as they did at the very start of the day.

U.S. crude rose 92 cents, or 2.8%, to $33.22 a barrel in New York. Brent crude, a benchmark for international oils, gained 79 cents, or 2.4%, to $33.89.

The price of U.S. oil has climbed 9.5% over the last three days amid signs that production may be reduced, which would strengthen the fuel's price.

Oil prices have been on a long, steep slide since 2014 as world stockpiles hit extremely high levels and investors feared demand would weaken. On Jan. 20, U.S. oil closed at a 12-year low of $26.55 a barrel.

Oil and natural gas producer Devon Energy rose $2.30, or 9.4%, to $26.79. Oil company Hess, which rose almost 6% Wednesday after it said it would cut more spending, picked up an additional $3.49, or 9.5%, to $40.34.

Facebook surged after reporting that its profit more than doubled in the fourth quarter. The social networking site gained 46 million users, giving it 1.59 billion around the world. The stock rose $14.66, or 15.6%, to $109.11, its best day since July 2013.

Facebook's results lifted the four big-name “FANG” stocks: Facebook, e-commerce giant Amazon, streaming video company Netflix and search engine operator Google. Amazon advanced almost 9%, while Google's parent company, Alphabet, and Netflix each rose about 4%.

“Since Facebook killed it yesterday, the others are enjoying a rally,” said Wedbush analyst Michael Pachter. “Facebook use is completely independent of Amazon use, but investors blindly bid up all of them when one does well.”

However, Amazon reported disappointing fourth-quarter results after the market closed, and its shares tumbled 14% in aftermarket trading.

E-commerce site EBay took its worst one-day loss in seven years after its guidance for the current quarter and the year disappointed investors. The stock lost $3.29, or 12.5%, to $23.13. EBay's former payment unit PayPal reported strong results and added $2.65, or 8.4%, to $34.24. That was the best result for PayPal since the company was spun off from EBay in July.

“While it is safe to say Amazon won this holiday season, EBay clearly lost,” said Wedbush analyst Gil Luria.

Under Armour reported a larger-than-expected profit and better revenue than analysts had forecast. The company said shoe revenue almost doubled on strong sales of Stephan Curry basketball sneakers. Its stock climbed $15.49, or 22.1%, to $84.07, for its biggest one-day gain in two years.

Drug stocks tumbled, and the biggest losses went to companies that make complex, costly drugs. Cancer drug maker Celgene lost $5.10, or 5%, to $97.21 after its 2016 estimates disappointed investors.

The Massachusetts attorney general's office said Wednesday it was investigating whether the high price of a new hepatitis C drug from another biotech firm, Gilead Sciences, violates state law. Gilead fell $2.10, or 2.3%, to $87.53.

Biotech stocks have fallen in recent months as controversy over drug prices has increased. The Nasdaq biotech index fell 3.5% on Thursday. That index hit a record high in July and has lost about a third of its value since then.

Abbott Laboratories lost $3.76, or 9.3%, to $36.71 after the maker of infant formula, medical devices and drugs posted quarterly profits that disappointed investors.

Quarterly earnings aided or pressured a wide variety of stocks. Construction and mining equipment maker Caterpillar reported better-than-expected results even though it is struggling with lower commodity prices and a weakening global economy. Its shares rose $2.76, or 4.7%, to $61.08.

Computer network equipment maker Juniper Networks tumbled after releasing disappointing forecasts for the current quarter. The company also said its chief financial officer was leaving. The stock lost $4.08, or 15.4%, to $22.46.

Overseas markets struggled after the Federal Reserve made cautious comments about the state of the global markets and growth in the U.S. Germany's DAX fell 2.4% and France's CAC-40 gave up 1.3%. The FTSE 100 index of leading British shares lost 1%. Japan's benchmark Nikkei 225 index gave up early gains to end 0.7% lower.

Gold declined 20 cents to $1,115.60 an ounce. Silver fell 22.7 cents, or 1.6%, to $14.232 an ounce. Copper lost 1.3 cents to $2.052 a pound.

In other energy trading, wholesale gasoline rose 3.3 cents to $1.079 a gallon. Heating oil rose 0.6 of a cent to $1.031 a gallon. Natural gas rose 2.5 cents to $2.182 per 1,000 cubic feet.

Bond prices rose. The yield on the 10-year Treasury note slipped to 1.98% from 2%. The euro rose to $1.0955 from $1.0907. The dollar rose to 118.78 yen from 118.64 yen.

Copyright © 2016, Los Angeles Times

UPDATES

2 p.m.: This article was updated with additional information.

1:16 p.m.: This article was updated with closing prices.

10:15 a.m.: This article was updated with more recent numbers and additional information.

8:51 a.m.: This article was updated with more recent numbers and additional information.

This article was originally published at 6:50 a.m.

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