Stock indexes inched upward Tuesday, led by gains in energy companies as the price of oil closed above $50 a barrel for the first time in almost a year.
The market had been on track for its highest close since July, but an afternoon stumble erased most of the early rally, leaving broad indicators with meager gains for the day.
Slumping bond yields increased the appeal of high-dividend stocks, sending prices for phone companies higher. Healthcare stocks sank as some poor results from clinical trials knocked drugmakers lower.
The Dow Jones industrial average edged up 17.95 points, or 0.1%, to close at 17,938.28. It was up as much as 82 points earlier in the day.
Benchmark U.S. crude oil advanced 67 cents, or 1.3%, to $50.36 a barrel in New York. Oil hadn’t closed at $50 a barrel or higher since July 21. Brent crude, which is used to price international oils, rose 89 cents, or 1.8%, to $51.44 a barrel in London.
Among energy companies, Chevron rose 2.1% to $103.32 and Newfield Exploration jumped 4.7% to $41.81. Helmerich & Payne climbed 4% to $67.35.
The dollar plunged after Friday’s jobs report as investors concluded that the Federal Reserve won’t raise interest rates any time soon. That has helped energy companies by putting upward pressure on the price of crude oil. Industrial companies have also had a good run.
“When you get a Fed that is now perceived to be lower for longer [on interest rates], with a dollar that is less likely to rally and an economy that may be slowing but is not in recession, that has tended to be a positive for those stocks in 2016,” said Julian Emanuel, U.S. equities and derivatives strategist for UBS.
Bond prices rose, sending the yield on the 10-year U.S. Treasury note down to 1.72% from 1.74%. That made bonds less appealing and sent income-seeking investors into phone company stocks. Verizon rose 2.1% to $51.75.
Canadian drugmaker Valeant Pharmaceuticals International disclosed its delayed first-quarter results and cut its profit and revenue estimates for the year. Its stock dived 14.6% to $24.64, and it’s down 90% since mid-September.
Two biotech drugmakers tumbled after important drugs failed in clinical testing. Biogen, which makes several treatments for multiple sclerosis, said a potential drug called opicinumab failed in a mid-stage clinical trial. Its stock sank 12.8% to $252.86.
Alexion Pharmaceuticals said a study of its drug Soliris failed, and its stock dropped 10.9% to $138.13. The company gets almost all of its revenue from Soliris, which is approved to treat two rare blood disorders, and an additional approval could have strengthened its sales. Shares of both Biogen and Alexion have plunged by about one-third since July.
Banks took more losses, as the prospect of lower interest rates suggested diminished profits. Goldman Sachs slipped 1.2% to $155.17 and Morgan Stanley fell 1.2% to $26.52.
Organic and specialty foods distributor United Natural Foods posted a larger-than-expected profit in its fiscal third quarter, and the company raised its projections for the year. Its stock jumped 14% to $44.28.
Real estate information website Zillow said it will pay $130 million to settle a lawsuit brought by competitor Move, which is owned by News Corp. Move had said that Zillow hired two of its executives and obtained trade secrets that helped Zillow buy another rival, Trulia, in 2014 and that it would seek as much as $1.8 billion in damages. Zillow Group shares rose 5.7% to $32.07.
Surgical implant maker Zimmer Biomet said it will buy spine surgery products maker LDR Holding for $1 billion, or $37 a share. LDR soared 63.8% to $36.99 and Zimmer fell 1.7% to $119.43.
Metals prices hardly budged. Gold fell 40 cents to $1,247 an ounce. Silver slipped 5 cents to $16.39 an ounce. Copper fell 1 cent to $2.05 a pound.
Wholesale gasoline held steady at $1.59 a gallon. Heating oil advanced 4 cents to $1.54 a gallon. Natural gas edged up 1 cent to $2.47 per 1,000 cubic feet.
Overseas, Germany’s DAX rose 1.6% and the CAC-40 in France was up 1.2%. The FTSE 100 index of leading British shares edged up 0.2%. Japan’s Nikkei 225 rose 0.6% and South Korea’s Kospi gained 1.3%. Hong Kong’s Hang Seng rose 1.4%.
The dollar slipped to 107.31 yen from 107.40 yen. The euro fell to $1.1361 from $1.1373.
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3:46 p.m.: This article was updated with closing prices and additional information.
12:10 p.m.: This article was updated with more recent prices and additional information.
This article was originally published at 7:01 a.m.