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Stocks post modest gains, led by energy companies

Stocks post modest gains, led by energy companies
Trader John Santiago works on the floor of the New York Stock Exchange on Monday. (Richard Drew / Associated Press)

U.S. stock indexes finished modestly higher Monday, extending the gains from the market’s rally last week.

Energy companies notched the biggest increases after the price of U.S. crude oil closed above $59 a barrel for the first time since November. Smaller-company stocks fared better than the rest of the market.

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Financial, consumer goods and technology stocks accounted for much of the gains. Goldman Sachs rose 2.1%, Advance Auto Parts climbed 4.4%, and Microsoft ticked up 1.4%.

That outweighed losses by communications and healthcare companies. Facebook slid 3.3%. Boston Scientific dropped 5.6%.

Stocks were riding the momentum from last week, when the Standard & Poor’s 500 index resumed its torrid start to the year following a five-day stumble. The index is back to within 3.5% of its record high, set in September, after clawing back from its dizzying December drop.

Investors are still waiting for a resolution of the costly U.S.-China trade war. After several weeks of negotiations, it’s not clear how close the two sides are to reaching an agreement. A meeting between President Trump and Chinese leader Xi Jinping to formalize a deal might be pushed back to June, according to some news reports.

Traders were also looking ahead to the Federal Reserve’s next interest rate policy update, set for Wednesday.

“In many ways, the market is in limbo,” said Sam Stovall, chief investment strategist at CFRA.

The S&P 500 rose 10.46 points, or 0.4%, to 2,832.94. The benchmark index is now up 13% for 2019 so far, which is a bigger gain than it’s had in four of the last five full years.

The Dow Jones industrial average rose 65.23 points, or 0.3%, to 25,914.10. The Nasdaq composite rose 25.95 points, or 0.3%, to 7,714.48. The Russell 2000 index of smaller-company stocks climbed 10.39 points, or 0.7%, to 1,563.93.

U.S. stocks have had a strong showing this year, with all the major indexes showing a gain of at least 11%.

One key factor in the recent rally has been the belief that the Fed will slow its pace of interest-rate increases. The worry in December was that the central bank would raise rates too fast in the face of a slowing global economy and choke off growth. The Fed will meet to discuss interest-rate policy this week, with an announcement scheduled for Wednesday, but economists expect it to announce no change to rates.

Some economists say the Fed could release documents Wednesday that would suggest one rate increase in 2019, or possibly zero, after the Fed raised rates four times in 2018 and three times in 2017.

Perhaps more important is what the Fed says about its vast trove of bonds. The central bank bought trillions of dollars’ worth of bonds after the 2008 financial crisis to keep interest rates low and support markets, and it has been slowly letting some roll off as they mature. Investors want to know how much the Fed will ultimately hold on to, and how long it will take to get there.

Monday’s upward swing in oil prices came after OPEC canceled a meeting that had been scheduled for next month. The move means that a production cut imposed by the oil cartel in January remains in place, at least until the cartel agrees to meet again.

Benchmark U.S. crude oil rose 1% to settle at $59.09 a barrel. Brent crude rose 0.6% to $67.54 a barrel.

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Energy stocks got a boost from the pickup in oil prices. National Oilwell Varco jumped 6.2%, Halliburton gained 3.2%, and Marathon Petroleum rose 2.7%.

Worldpay’s U.S.-listed shares jumped 10% after Fidelity National Information Services agreed to buy the payment processor for about $35 billion in stock and cash. Including Worldpay’s debt, Fidelity National valued the deal at $43 billion. Shares of Fidelity National, also called FIS, slipped 0.7%.

Edwards Lifesciences climbed 6.2% for the biggest gain in the S&P 500 after it said patients in a trial using an expandable valve had better results than those who had standard open-heart surgery.

Boeing fell further as the investigation continues into two recent deadly crashes of its 737 Max 8 plane model. Preliminary information shows clear similarities between the two accidents. The stock declined 1.8%, following its 10.3% loss last week.

Overstock.com declined 5.7% after the online retailer announced a quarterly loss that was much wider than investors expected.

Synaptics dived 22.6% after the company, which makes touchpad technology, announced that its chief executive was leaving effective immediately and issued a weak forecast.

Bond prices fell. The yield on the 10-year Treasury rose to 2.61% from 2.59%.

The dollar fell to 111.41 yen from 111.48 yen. The euro strengthened to $1.1338 from $1.1320.

Gold fell 0.1% to $1,301.50 an ounce. Silver was little changed at $15.32 an ounce. Copper rose 0.1% to $2.91 a pound.

Wholesale gasoline climbed 1.4% to $1.88 a gallon. Heating oil rose 0.1% to $1.97 a gallon. Natural gas climbed 2% to $2.85 per 1,000 cubic feet.

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