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Stocks rise as oil prices rally

Stocks rise as oil prices rally
"Wall Street" is etched in the facade of a building in New York's financial district. (Richard Drew / Associated Press)

Energy companies jumped with the price of oil Wednesday, but overall, stocks finished only slightly higher as a quiet week of trading continued.

The price of U.S. crude oil jumped 3% as fuel stockpiles kept shrinking, and that made investors more optimistic about energy company profits. Strong earnings from video game maker Electronic Arts and chipmaker Nvidia helped technology stocks move up. However, weak results from Priceline and Disney hurt consumer-focused companies, and healthcare stocks stumbled as drug companies fell.

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Investors didn't react much to President Trump's surprise decision to fire FBI Director James Comey on Tuesday. U.S. stocks also had little reaction to the French presidential election last weekend, although European indexes climbed after the win by centrist candidate Emmanuel Macron.

"It's almost as if the market has become numb," said Julian Emanuel, an equity strategist for UBS. "Investors are interpreting this as more noise."

Emanuel said investors are focused on economic growth and the Trump administration's business-friendly agenda. Until they have a clearer understanding of how well the economy is doing and whether Trump's policies will be implemented, he said, investors may just wait and see, in which case stocks will stay in the range they've traded in for the last few months.

The Standard & Poor's 500 index ticked up 2.71 points, or 0.1%, to 2,399.63, a fraction of a point above the all-time high it set Monday. The Dow Jones industrial average fell 32.67 points, or 0.2%, to 20,943.11 as Disney and Boeing slumped. The Nasdaq composite finished at a record for the fourth day in a row; it rose 8.56 points, or 0.1%, to 6,129.14. The Russell 2000 index of small-company stocks climbed 7.73 points, or 0.6%, to 1,399.59.

Oil prices made big gains as reports showed U.S. crude stockpiles dropped by 5.2 million barrels last week — a bigger drop than analysts expected. Crude inventories are returning to more normal levels after they swelled to record highs the last few years.

Benchmark U.S. crude surged $1.45, or 3.2%, to $47.33 a barrel in New York. Brent crude, the international standard, jumped $1.49, or 3.1%, to $50.22 a barrel in London

EOG Resources jumped 3.2% to $94.54. Chevron advanced 1.4% to $106.50.

Crude oil prices have fallen in recent weeks as investors wondered if the members of OPEC and other key oil-producing countries will be able to limit production and support prices. U.S. oil has traded between about $45 and about $55 a barrel this year as investors worried about oil prices and profits at energy companies. The S&P 500's energy sector has dropped 10% in 2017.

Nvidia leaped 17.8% to $121.29. The chipmaker tripled in value in 2016 and wobbled early this year. Electronic Arts, which makes games including "The Sims" and "Mass Effect," rose 12.7% to $108.16.

Emanuel, of UBS, said investors are rewarding companies that are reporting strong earnings growth but don't depend too much on faster economic growth. That includes technology companies and banks.

Entertainment giant Disney fell 2.2% to $109.66 after posting lower sales than investors expected and saying profit at its cable networks declined. Recently Disney stock suffered a five-day losing streak partly brought on by concerns about cable advertising revenue.

Online booking service Priceline slid 4.5% to $1,824.41 after posting revenue that was a bit lower than analysts expected and issuing a disappointing profit forecast for the current quarter. Priceline has soared 44% over the last 12 months.

Boeing fell 1.2% to $183.18 after it suspended test flights of its new 737 Max plane because of possible problems with a key engine part. The Max is designed to be a more fuel-efficient version of the 737, Boeing's most popular commercial plane.

Online review website Yelp plunged 18.4% to $28.33, its lowest price in almost a year, after it slashed its revenue forecast for the year. That followed a disappointing first-quarter report, and analysts said the company struggled to retain customers.

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Fossil tumbled 20.4% to $14.44 after another weaker-than-expected quarterly report. The watchmaker said sales of traditional watches and other jewelry continued to fall. Its stock traded above $100 a share as recently as December 2014 but lately has been trading at eight-year lows.

Bond prices rose early but later returned that gain. The yield on the 10-year Treasury note remained at 2.41%.

Wholesale gasoline rose 5 cents to $1.54 a gallon. Heating oil rose 3 cents to $1.48 a gallon. Natural gas rose 7 cents to $3.29 per 1,000 cubic feet.

Gold rose $2.80 to $1,218.90 an ounce. Silver rose 14 cents to $16.21 an ounce. Copper was flat at $2.49 a pound.

The dollar rose to 114.33 yen from 114.28 yen. The euro fell to $1.0862 from $1.0869.

In Britain, the FTSE 100 jumped 0.6%. Germany's DAX rose 0.1% and the CAC 40 in France finished unchanged. The Japanese Nikkei 225 gained 0.3% and Hong Kong's Hang Seng index rose 0.5%. The Kospi of South Korea fell 1%.

UPDATES:

2:05 p.m.: This article was updated with closing prices, context and analyst comment.

This article was originally published at 7:05 a.m.

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