Stocks eke out tiny gains; utilities and telecom firms rise, but oil tumbles
U.S. stocks struggled through a turbulent day of trading Tuesday and eked out small gains, led by utility and consumer stocks. The price of crude oil continued to fall, and energy and mining stocks tumbled.
Stocks in Asia and Europe had rallied earlier in the day as investors were satisfied with China’s fourth-quarter economic growth. The Dow Jones industrial average rose as much as 183 points in the first minutes of trading Tuesday. The gains faded in the afternoon before a late spurt of buying in the last half hour sent indexes mostly higher.
The Dow rose 27.94 points, or 0.2%, to 16,016.02. The Standard & Poor’s 500 index rose one point to 1,881.33. The Nasdaq composite index fell 11.47 points, or 0.3%, to 4,476.95. Major indexes had plunged Friday, and the Dow and S&P 500 are coming off their worst ever opening weeks of a year.
The Chinese government’s report confirmed that the world’s second-largest economy is slowing, as annual growth hit a 25-year low in 2015. That can affect demand for energy, metals, consumer goods, heavy machinery and more. Fears about a slowdown in China, and how abrupt and painful it might be, has helped knock oil prices to 12-year lows.
Safe-play stocks such as utilities and telecommunications companies rose the most. AT&T rose 52 cents, or 1.5%, to $34.51, and NextEra Energy went up $2.55, or 2.4%, to $107.81. Consumer goods maker Procter & Gamble, the maker of Tide detergent and Charmin toilet paper, climbed $1.75, or 2.3%, to $76.73.
U.S. crude fell 96 cents, or 3.3%, to close at $28.46 a barrel in New York. Brent crude, a benchmark for international oils, rose 21 cents to close at $28.76 a barrel in London.
Energy stocks continued to fall on concerns about reduced worldwide demand. Chesapeake Energy dived 48 cents, or 13.5%, to $3.08. Marathon Oil fell 46 cents, or 5.7%, to $7.68.
The price of gold fell $1.60 to $1,089.10 an ounce. Silver rose 22.5 cents, or 1.6%, to $14.121 an ounce. Copper climbed 3.4 cents, or 1.7%, to $1.978 a pound. Gold miner Newmont Mining lost $1.39, or 7.9%, to close at $16.31, and copper producer Freeport-McMoRan gave up 39 cents, or 9%, to close at $3.96. The company’s shares have skidded 41.5% this year so far.
Delta Air Lines reported a bigger fourth-quarter profit because of falling fuel prices and said it expects fuel to be even less expensive in the first quarter of this year. Its shares rose $1.46, or 3.3%, to $45.96.
Health insurer UnitedHealth Group posted stronger-than-expected results in the fourth quarter. Its stock rose $3.31, or 3%, to $112.58.
Netflix surged in aftermarket trading as the company’s net income surpassed analyst forecasts and its international subscriber growth was stronger than the company had expected. Netflix’s stock leaped 8% in extended trading to $116.75.
Jewelry retailer Tiffany’s stock fell after the company reported that sales dropped in the fourth quarter and said it would eliminate some jobs. The company also forecast minimal earnings and sales growth in 2016. The stock slid $3.43, or 5.1%, to $64.22.
So far, not a single U.S. company has gone public this year, according to Kathy Smith of Renaissance Capital, a manager of IPO-focused exchange-traded funds. That should change this week, as Elevate Capital, which offers credit and related services to people with below-average credit, is expected to start trading Friday. But Smith said only two companies will go public this month. There were also just two initial public offerings in December, the fewest in any month since October 2011.
“The IPO market is pretty close to being closed,” Smith said.
Companies are reluctant to go public when the market is weak, and those that did go public last year weren’t rewarded for it: Smith said the companies that completed their IPOs in 2015 are down an average of 17% from their offering prices.
France’s CAC 40 rose 2%, and Germany’s DAX added 1.5%. Britain’s FTSE 100 gained 1.7%. China’s Shanghai Composite surged 3.2%, and Hong Kong’s Hang Seng gained 2.1%. Japan’s Nikkei 225 inched up 0.5%.
The U.S. dollar slipped to 117.44 yen from 117.50 yen on Monday. The euro rose to $1.0923 from $1.0885. Bond prices slipped. The yield on the 10-year Treasury note, which has slumped this year, rose to 2.05% from at 2.04%.
In other trading of energy futures, the price of wholesale gasoline inched up half a cent to $1.026 a gallon. Heating oil fell 2.6 cents to 90.9 cents a gallon. Natural gas slipped 0.9 of a cent to $2.091 per 1,000 cubic feet.
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