Stocks mostly climb as oil rises sharply
U.S. stock indexes closed mostly higher Wednesday after a sharp increase in crude oil prices helped drive market-leading gains for energy companies.
Banks and other financial stocks declined the most as bond yields headed down, which translates into lower interest rates on loans and lower profits for banks.
The Dow Jones industrial average ended in the red, while the Standard & Poor’s 500 index and Nasdaq composite eked out modest gains. Two stocks rose for every one that fell on the New York Stock Exchange.
“After yesterday’s bounce back, you’re seeing a little sideways action today,” said Jeff Zipper, managing director at the Private Client Reserve of U.S. Bank.
The S&P 500 index rose 2.56 points, or 0.1%, to 2,361.13. The Dow fell 42.18 points, or 0.2%, to 20,659.32. The Nasdaq composite index rose 22.41 points, or 0.4%, to 5,897.55.
Bond prices rose. The 10-year Treasury yield fell to 2.39% from 2.42%.
A day after Wall Street rallied on news that U.S. consumer confidence reached its highest level since 2000, the market got another dose of encouraging economic data Wednesday.
The National Assn. of Realtors said more people signed contracts to buy U.S. homes last month as warm weather and rising confidence appeared to encourage consumers to look for houses. The group’s pending home sales index climbed 5.5% in February to 112.3, its highest point since April and its second-highest since 2006.
Investors are hoping that Congress and the White House will enact tax cuts and other business-friendly policy proposals that President Trump promised during his campaign. Those expectations helped lift the market in the weeks after the November election. But some of that investor optimism dimmed recently after the Trump administration’s bid to begin repealing the Affordable Care Act was pulled after a GOP healthcare overhaul bill failed to attract enough votes.
“It’s really wait-and-see with the focus back on Washington and tax reform,” Zipper said.
Investors also had their eye on the latest company earnings news.
RH, formerly Restoration Hardware, climbed 14.9% to $43.68 the day after the home furnishings and decor retailer reported stronger earnings.
Verint Systems jumped 10% to $43.50 after the software company reported better-than-expected quarterly results. Verint also said that it might split itself into two businesses at some point, but that it has no plans now to do so.
Dave & Buster’s Entertainment fell 3.4% to $60.09 after the arcade and restaurant chain announced disappointing sales at older locations.
Depomed slid 3.1% to $13.79 after the drug-maker issued disappointing first-quarter sales guidance and replaced its CEO and two board members to resolve a dispute with investment firm Starboard Value.
Not all drug-makers had a rough day.
Vertex Pharma soared 20.5% to $108.01 after the drug-maker disclosed results from two studies of a new cystic fibrosis treatment. The company said patients treated with a new experimental drug plus its own Kalydeco had improved lung function.
Meanwhile, Exar surged 22.3% to $12.99 after MaxLinear agreed to buy the chipmaker for $13 a share, or $662 million. MaxLinear rose 5.8% to $28.06.
Several major overseas stock indexes closed higher. In Europe, Germany’s DAX climbed 0.4%, while France’s CAC 40 added 0.5%. Britain’s FTSE 100 gained 0.4% against the backdrop of Britain triggering the start of its exit from the European Union. Earlier in Asia, Tokyo’s benchmark Nikkei 225 index edged up 0.1%. South Korea’s Kospi rose 0.2%. Hong Kong’s Hang Seng added 0.2%. And Australia’s S&P/ASX 200 rose 0.9% to 5,873.50.
In currency trading, the dollar fell to 111.07 yen from 111.09 yen. The euro fell to $1.0759 from $1.0808.
Oil prices climbed after Iran’s oil minister said that the recent production cut deal will probably be extended, and that fighting in Libya is affecting its oil industry.
Benchmark U.S. crude oil futures rose $1.14, or 2.4%, to $49.51 a barrel. Brent crude, used to price international oils, climbed $1.09, or 2.1%, to $52.42 a barrel. Natural gas rose 8 cents to $3.18 per 1,000 cubic feet, wholesale gasoline rose 4 cents to $1.67 per gallon and heating oil rose 3 cents to $1.54 per gallon.
Gold fell $1.90 to $1,253.70 an ounce. Silver held steady at $18.25 an ounce. Copper was flat at $2.68 a pound.
UPDATES:
2:25 p.m.: This article was updated with closing prices, context and analyst comments.
This article was originally published at 10:35 a.m.
