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Stocks rise modestly; oil closes above $70 a barrel for first time since 2014

Trader Gordon Charlop confers with colleague Lauren Simmons on the floor of the New York Stock Exchange.
(Richard Drew / Associated Press)

U.S. stocks closed modestly higher Monday, extending the market’s gains from last week.

Technology companies and banks accounted for much of the latest gains, outweighing losses by beverage makers and other consumer goods companies.

Energy stocks got a boost from U.S. crude oil prices, which closed above $70 a barrel for the first time since November 2014.

“Geopolitical risk has cooled a little bit and economic data, even if it isn’t accelerating as fast as it was a month ago, is still accelerating,” said Karyn Cavanaugh, senior markets strategist at Voya Investment Management. “The last couple of days are showing that investors are getting their sea legs back.”

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The Standard & Poor’s 500 index rose 9.21 points, or 0.3%, to 2,672.63. The Dow Jones industrial average rose 94.81 points, or 0.4%, to 24,357.32. The Nasdaq advanced 55.60 points, or 0.8%, to 7,265.21. The Russell 2000 index of smaller-company stocks climbed 13.34 points, or 0.9%, to 1,578.95.

Trading got off to a solid start early Monday as investors weighed the big move in energy futures.

Crude oil prices have been rising as investors weigh heightened geopolitical risks in the Middle East, a push by OPEC to slash oil production, and strong worldwide demand amid a global economic expansion.

On Monday, oil futures climbed to their highest level since November 2014 as a May 12 deadline approached for the United States to decide whether to remain in its nuclear agreement with Iran.

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Benchmark U.S. crude rose $1.01, or 1.4%, to settle at $70.73 a barrel in New York. Brent crude, the international standard, jumped $1.30, or 1.7%, to $76.17 a barrel in London.

The jump in oil prices helped lift energy companies’ shares. Range Resources rose 3.7% to $14.12.

“Concern about Iran has oil up, taking energy stocks up and helping out the whole market,” said Erik Davidson, chief investment officer at Wells Fargo Private Bank.

Technology companies accounted for a big slice of the S&P 500’s gains. Nvidia led the sector, rising 4% to $248.68. Financial sector stocks also racked up solid gains. Morgan Stanley rose 1.9% to $52.39.

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Walgreens Boots Alliance slumped 2.4% to $62.30, the biggest decliner in the sector that includes food, beverage and other consumer goods companies.

After a couple of weeks of choppy trading, the market got a strong boost Friday from government data showing that hiring continued at a solid clip in April, the latest evidence that the U.S. economy remains resilient despite some jitters about trade tensions.

Corporate earnings have also been a source of good news for investors.

Roughly 80% of the companies in the S&P 500 have reported results so far this earnings season, and some 62% of those have delivered both earnings and revenue that exceeded financial analysts’ expectations, according to S&P Global Market Intelligence.

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“The market doesn’t seem quite as skeptical about the future prospects as maybe it was a couple of weeks ago,” Davidson said.

Sysco shares rose 1.9% to $63.48 on Monday after the food distributor reported earnings for its latest quarter that beat analyst expectations.

Cognizant Technology Solutions slid 5.2% to $77.86 after the information technology consulting firm’s earnings outlook for the current quarter fell short of analysts’ forecasts.

Investors also had their eye on company deal news.

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Starbucks slipped 0.4% to $57.45 after Nestle agreed to pay $7.15 billion for the rights to sell Starbucks’ coffee products around the world. Nestle rose 1.4% to $77.35.

Shares in Athenahealth leaped 16.4% to $146.75 on news that Elliott Management has made a bid to acquire the medical software and services company.

Gramercy Property Trust jumped 15.4% to $27.50 after Blackstone Group offered to buy the commercial real estate owner in a deal valued at about $7.6 billion.

Bond prices were little changed. The yield on the 10-year Treasury held at 2.95%.

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The dollar fell to 109.06 yen from 109.11 yen. The euro weakened to $1.1923 from $1.1962.

Gold slipped 60 cents to $1,314.10 an ounce. Silver fell 2 cents to $16.50 an ounce. Copper fell a penny to $3.08 a pound.

In other energy futures trading, heating oil rose 3 cents to $2.19 a gallon. Wholesale gasoline rose 2 cents to $2.13 a gallon. Natural gas rose 3 cents to $2.74 per 1,000 cubic feet.

Major stock indexes in Europe closed higher. Germany’s DAX climbed 1%. The CAC 40 in France rose 0.3%. British stock markets were closed for a public holiday.

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Earlier in Asia, Japan’s benchmark Nikkei 225 index slipped less than 0.1%. Hong Kong’s Hang Seng index rose 0.2%. Taiwan’s benchmark rose, but Southeast Asian indexes finished mostly lower. South Korean markets were closed for a holiday. Australia’s S&P/ASX 200 added 0.4%.


UPDATES:

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

This article was originally published at 8:55 a.m.

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