Most stocks fall, but oil lifts Dow to a new record high

Flags fly at the New York Stock Exchange on Wall Street.

By Associated Press

Dec. 12, 2016 2:35 PM PT

Stocks mostly fell Monday, but a spurt in oil prices helped push the energy sector higher and the Dow Jones industrial average to another record.

The Dow rose 39.58 points, or 0.2%, to extend the record it set Friday. The Standard & Poor’s 500 index, which is the benchmark for many more investors than the Dow, pulled back from its record, also set Friday, and slipped 2.57 points, or 0.1%, to 2,256.96. The Nasdaq composite fell 31.96, or 0.6%, to 5,412.54.

The Dow made the lone gain among the big three indexes thanks partly to Exxon Mobil and Chevron. Those stocks rose with oil, which touched its highest price since summer 2015 after the Organization of the Petroleum Exporting Countries persuaded Russia and 10 other oil-producing nations to announce production cuts over the weekend.

Energy stocks in the S&P 500 rose 0.7%. Six of the index’s 11 sectors posted gains.

Still, nine stocks fell on the New York Stock Exchange for every five that rose, and the day’s loss marked the end of a six-day winning streak for the S&P 500, its longest such run since June 2014.

Some investors say they’re taking a more cautious, wait-and-see approach after the market’s strong run over the last month. The S&P 500 has climbed 5.4% since the election on expectations that proposed tax cuts will lead to higher profits for businesses and that less regulation may create stronger economic growth.

“Unless and until we see hard evidence of the economy picking up, we’re going to take these profits as a gift and pocket them,” said Rich Weiss, senior portfolio manager at American Century. Mutual funds he oversees have been paring back their stock investments in recent days and weeks as stocks’ prices have shot higher.

Donald Trump’s surprise victory in the presidential election has also driven up expectations for inflation, which has helped drive bond yields upward. Inflation is one of bond investors’ biggest fears, and they’re demanding higher yields to compensate for the perceived increase in risk.

The yield on the 10-year Treasury note rose above 2.50% to its highest level since autumn 2014 before settling back at 2.47% on Monday, where it was late Friday.

The Federal Reserve is to wrap up its two-day policy meeting Wednesday, and investors almost universally expect it to raise short-term interest rates for just the second time in a decade.

The central bank has held interest rates near zero since the Great Recession in hopes of driving economic growth, though the low rates have also squeezed savers looking for income from bank accounts and bonds.

The price of U.S. benchmark crude rose 2.6% to settle at $52.83 a barrel. The Brent crude, the international standard, rose 2.5% to $55.69 a barrel.

That helped Exxon Mobil shares rise 2.2% to $90.98. Chevron rose 1.2% to $117.15, and ConocoPhillips rose 1.2% to $51.38.

The biggest loss in the S&P 500 came from Alexion Pharmaceuticals, which dropped 12.9% to $115.08 after the company named an interim chief executive and a new chief financial officer. The biopharmaceutical company is in the midst of an investigation into its sales practices.

Viacom had the second-biggest decline in the index. The media company — which owns Paramount, Comedy Central and MTV — fell 9.4% to $34.99 after National Amusements, which controls both Viacom and CBS, said it’s no longer looking to combine the two. CBS shares slipped 0.6% to $62.18.

Lockheed Martin fell 2.5% to $253.11 after President-elect Trump tweeted that the cost of its F-35 fighter jet program “is out of control.” Last week, Trump criticized Boeing; that tweet briefly caused Boeing stock to drop, though those shares quickly turned higher again.

Chipotle Mexican Grill climbed 3.4% to $382.48. The struggling burrito chain named company founder Steve Ells as its sole CEO, with co-CEO Monty Moran retiring.

Natural gas dropped 23.9 cents, or 6.4%, to $3.507 per 1,000 cubic feet, giving up some of its big gains from the past month. Natural gas, which often rises with expectations of colder temperatures and increased electricity usage, rose last week to its highest price in two years.

Wholesale gasoline rose 4 cents to $1.54 per gallon, and heating oil rose 3 cents to $1.67 a gallon.

Gold rose $3.90 to $1,165.80 per ounce. Silver rose 22 cents to $17.19 an ounce and copper fell 3 cents to $2.62 per pound.

The dollar fell against many of its rivals, including the British pound and Canadian dollar. The euro rose to $1.0630 from $1.0551, and the dollar fell to 115.12 yen from 115.23 yen.

In Europe, Britain’s FTSE 100 stock index fell 0.9% and Germany’s DAX shed 0.1%. France’s CAC 40 was down 0.1%. In Asia, Japan’s Nikkei 225 index rose 0.8%, South Korea’s Kospi index inched up 0.1% and Hong Kong’s Hang Seng fell 1.4%.

UPDATES:

2:35 p.m.: This article was updated with closing prices, context and analyst comment.

1:10 p.m.: This article was updated with the close of markets.

This article was originally published at 7:10 a.m.