Energy stocks rise, oil wavers between small gains and losses
NEW YORK _ Stocks made modest gains on Thursday as the market once again turned higher late in the day. Energy stocks led the way as investors continued to hope that oil prices have stabilized after almost two years of steep declines.
For the second day in a row, stocks opened with small losses and gradually rose during the afternoon. Energy companies surged and are now slightly higher for the year. Industrial companies like Caterpillar and Deere also rose. Drugmakers led a decline in health care stocks.
The Dow Jones industrial average gained 44.58 points, or 0.3 per cent, to 16,943.90. The Standard & Poor’s 500 index edged up 6.95 points, or 0.4 per cent, to 1,993.40. Tech stocks lagged, and the Nasdaq composite index added 4 points, or 0.1 per cent, to 4,707.42.
Stocks have eked out small gains over the last two days, aided by steady oil prices and reports showing the U.S. economy is on solid footing. After a big jump on Tuesday, and the market is on target for its third consecutive weekly gain.
The price of U.S. crude wavered between small gains and losses, finally closing down 9 cents at $34.57 a barrel in New York. Brent crude, the benchmark for international oils, added 14 cents to $37.07 a barrel in London. The price of U.S. oil has risen more than 30 per cent in three weeks, and Brent crude has erased its losses for the year.
ConocoPhillips rose $2.07, or 5.7 per cent, to $38.56 and Southwestern Energy jumped $1.13, or 18.2 per cent, to $7.34.
Chesapeake Energy continued to skyrocket after the company said it does not expect to be prosecuted or fined as part of a federal investigation into founder and former company head Aubrey McClendon, who left the company in 2013.
Early Wednesday, McClendon was indicted by a federal grand jury on charges of rigging gas-lease bids. Later in the day officials announced that McClendon had died in a single-car crash in Oklahoma City.
The stock jumped 23 per cent Wednesday and added another 87 cents, or 25.6 per cent, to $4.27. The stock tumbled 74 per cent in 2015.
J.J. Kinahan, chief market strategist for TD Ameritrade, said that after Tuesday’s surge, investors are being patient and looking for good news about the state of the economy. That could come Friday morning, when the government reports its latest employment figures.
Kinahan said investors will be looking for signs of growth in better-paying jobs, possibly in the manufacturing or health care industries, as opposed to restaurants and hotels.
“We know we’re not going to be a manufacturing economy again,” he said, but investors hope to see some growth in manufacturing jobs instead of losses.
The Commerce Department said orders to U.S. factories grew 1.6 per cent in January, the biggest gain in seven months. A category that measures business investment rose by the largest amount in 19 months.
Mining equipment maker Joy Global climbed $2.77, or 20.8 per cent, to $16.09 after its first-quarter sales were stronger than expected. 3D printer maker Stratasys rose $3.64, or 17.4 per cent, to $24.53. The company’s fourth-quarter results were better than expected and it gave a strong forecast for 2016.
Supermarket operator Kroger dropped $2.85, or 7 per cent, to $37.80 after investors were disappointed with its quarterly sales and its forecasts.
Losses for biotech drug companies pulled health care stocks lower. Cancer drugmaker Celgene lost $2 to $102.73, and hepatitis C drugmaker Gilead Sciences fell 97 cents to $87.83. Alexion Pharmaceuticals sank $5.74, or 3.8 per cent, to $145.85.
The prices of gold, silver, and copper each rose about 1 per cent. Gold rose $16.40 to $1,258.20 an ounce and silver closed up 12 cents at $15.15 an ounce. Copper advanced 3 cents to $2.21 a pound. The price of gold has climbed almost 19 per cent this year, and silver has risen about 10 per cent.
Britain’s FTSE 100 and Germany’s DAX each fell 0.3 per cent. France’s CAC 40 declined 0.2 per cent. Asian markets closed mostly higher. Japan’s Nikkei 225 rose 1.3 per cent and South Korea’s Kospi gained 0.6 per cent. Hong Kong’s Hang Seng index fell 0.3 per cent.
Chinese leaders were expected to lower their growth target during the upcoming gathering of the National People’s Congress this week as China seeks more flexibility for structural reforms for the slowing, state-dominated economy. The growth target due to be announced on Saturday is expected to be a range of 6.5 to 7 per cent, down from 2015’s goal of about 7 per cent.
In other energy trading, wholesale gasoline lost 1 cent to $1.30 a gallon. Heating oil rose 1 cent to $1.12 a gallon. Natural gas, which is trading at 17-year lows, fell 4 cents to $1.64 a gallon.
Bond prices edged higher. The yield on the 10-year Treasury note dipped to 1.83 per cent from 1.84 per cent late Wednesday. The euro rose to $1.0950 from $1.0868 and the dollar edged up to 113.52 yen from 113.45 yen.
The Canadian Press