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Oil prices rise slightly, tranquil start to last trading day of stormy quarter

Oil prices, energy stocks rise

Oil prices

Oil prices rose slightly on Thursday morning.  BP Facebook photo.

NEW YORK _ Stocks are slightly higher Thursday afternoon, a tranquil start to the last trading day of what has been a stormy first quarter. Health care stocks, which have suffered this year, are inching higher. The gains are adding to a strong March that wiped away steep losses from the start of the year.

KEEPING SCORE: The Dow Jones industrial average gained 37 points, or 0.2 per cent, to 17,743 as of 12:06 p.m. Eastern time. The Standard & Poor’s 500 index added four points, or 0.2 per cent, to 2,067. The Nasdaq composite index rose 19 points, or 0.4 per cent, to 4,888.

FIRST QUARTER: Stocks tumbled in January and early February on concerns that weak growth in several major global economies would pull the U.S. economy into recession. In early February, the Dow average and the S&P 500 index were down more than 10 per cent from the start of the year. Stocks roared back in March as investors were encourage by positive economic news in the U.S. and central bank moves around the world to stimulate economic growth.

The Dow is on track to finish the first three months of the year up 1.9 per cent, while the S&P 500 is headed for a 1.2-per cent gain.

JOBS: The federal government said more Americans filed for unemployment benefits last week, but the number of applications remains very low, a sign that hiring is solid. About 276,000 people filed for those benefits, up 11,000 from the week before. The government will release March employment data on Friday.

GOLD SHINES: The price of gold rose $7.90, or 0.6 per cent, to $1,236.50. Gold is trading at its highest price in more than a year, and it’s surged almost 17 per cent in 2016. That’s the biggest gain in any quarter since 1986. Demand for gold has risen because of concerns about the health of the global economy, central bank policies, and more recently, because the U.S. dollar has started to weaken after years of gains.

ANOTHER DEAL: IBM rose $4.02, or 2.7 per cent, to $152.43 after the company said it will expand its business services division by buying Bluewolf Group, which provides cloud consulting and implementation services. IBM didn’t disclose terms.

A month ago IBM agreed to buy Truven Health Analytics in a $2.6 billion deal intended to strengthen the health care capabilities of its Watson cognitive computing system. In October it agreed to buy the data, technology and websites of the Weather Company, which owns the Weather Channel.

ENDO DOWN AGAIN: Generic drugmaker Endo International fell after the company was sued by federal regulators. The Federal Trade Commission is suing Endo and a group of competitors, saying Endo paid them to hold off on selling lower-cost versions of its pain drug Opana ER and its shingles pain treatment Lidoderm. The FTC said the deals violated antitrust law and hurt consumers.

Endo, which has lost more than half its value in 2016, fell $1.16, or 4.1 per cent, to $27.29.

ENERGY: Benchmark U.S. crude rose 31 cents to $38.63 per barrel in New York. Brent crude, used to price international oils, added 47 cents, or 1.2 per cent, to $40.52 a barrel in London. Energy stocks also traded higher. Southwestern Energy rose 31 cents, or 4 per cent, to $8.01 and Devon Energy rose 69 cents, or 2.6 per cent, to $26.89.

TICK TOCK: Watchmaker Movado lost $2.60, or 8.6 per cent, to $27.74 after its profit and sales forecasts for 2016 fell short of analyst estimates.

HEALTH CARE: Health care stocks rebounded at the end of a difficult quarter. Drug company stocks have slid as federal regulators investigate the prices of costly drugs, which could affect drug companies’ ability to keep raising prices. Overall, the S&P 500’s health care companies are down more than 5 per cent this year.

EARNINGS: Companies will start reporting their first-quarter results on April 11. Analysts expect earnings for the companies on the S&P 500 to fall more than 7 per cent, according to S&P Capital IQ. The main reason is the energy sector, which is expected to post broad losses because the price of oil has plunged.

Earnings also fell in the last two quarters, but are expected to improve later this year and finish a little higher in 2016. That would be the second straight year of very slow earnings growth.

BONDS, CURRENCIES: Bond prices rose slightly. The yield on the 10-year U.S. Treasury note dipped to 1.80 per cent from 1.83 per cent. The dollar continued to weaken. On Thursday it edged down to 112.40 from 112.47 yen. The euro edged up to $1.1403 from $1.1333. Commodities prices tend to rise when the dollar gets weaker. That’s because the commodities are priced in dollars, and a weaker dollar tends to boost demand.

OVERSEAS: Stocks in Europe retreated after Wednesday’s surge. France’s CAC-40 fell 1.3 per cent and Germany’s DAX declined 0.8 per cent. In London the FTSE 100 index was off 0.5 per cent. Tokyo’s Nikkei 225 fell 0.7 per cent to 16,758.67 and the Hang Send in Hong Kong retreated 0.1 per cent.

The Canadian Press.

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