US stocks rise as oil changes course again and rises
Stock gain, driven by a turn higher in crude oil prices
(35 minutes later)
NEW YORK — U.S. stocks jumped higher Tuesday as the price of oil made another abrupt reversal, this time rising nearly 4 percent after falling sharply the day before. Consumer stocks are getting a lift from strong fourth-quarter results from companies like Procter & Gamble and handbag maker Coach.
NEW YORK — U.S. stocks closed sharply higher as the price of crude oil made another sudden turn, this time to the upside.
KEEPING SCORE: The Dow Jones industrial average rose 262 points, or 1.7 percent, to 16,147 as of 2:55 p.m. Eastern time. The Standard & Poor’s 500 index climbed 23 points, or 1.3 percent, to 1,900. The Nasdaq composite added 47 points, or 1 percent, to 4,565.
The price of oil surge almost 4 percent Tuesday, reversing a slump from the day before.
ENERGY RISES: Energy stocks gained ground as the price of U.S. crude rose $1.10, or 3.7 percent, to close at $31.45 a barrel in New York. It fell almost 6 percent Monday. Brent crude, a benchmark for international oils, rose $1.30, or 4.3 percent, to $31.80 a barrel in London.
Chevron and Exxon Mobil each jumped 4 percent.
Exxon Mobil picked up $1.91, or 2.6 percent, to $75.89 and Chevron rose $2.48, or 3.1 percent, to $83.37.
Consumer stocks gained after Procter & Gamble and Coach reported earnings that were better than analysts were expecting.
Despite oil’s gain today, it is down nearly 18 percent this month.
The Dow Jones industrial average rose 282 points, or 1.8 percent, to 16,167.
IN THE BAG: Luxury handbag maker Coach reported a greater profit than analysts had expected, and its stock rose $3.18, or 10.5 percent, to $33.53. Even with that big gain, however, it’s down 9 percent over the last 12 months.
The Standard & Poor’s 500 index climbed 26 points, or 1.4 percent, to 1,903. The Nasdaq composite added 49 points, or 1.1 percent, to 4,567.
P&G PRICE GAINS: Consumer goods maker Procter & Gamble reported a larger profit in the fourth quarter as it raised prices and cut costs. The maker of Pantene shampoo, Crest toothpaste and Charmin toilet paper added $2.11, or 2.7 percent, to $78.96.
Bond prices rose. The yield on the 10-year Treasury note rose to 2 percent.
BANKED: Huntington Bancshares agreed to buy competitor FirstMerit Corp for $3.4 billion. The deal would create the largest bank in Ohio, and the companies would have about $100 billion in combined assets. FirstMerit added $2.74, or 17.8 percent, to $18.11 and Huntington lost 75 cents, or 8.5 percent, to $8.50.
DOW POWER: The Dow is doing particularly well because many of the companies making the biggest gains, including Procter & Gamble, Exxon, Chevron and 3M are all Dow components. The Nasdaq is making smaller gains because tech stocks are little changed.
FULL SPRINT: Sprint, the fourth-largest wireless provider in the U.S., posted a smaller loss in its third quarter and said its aggressive promotions lured more users. The company raised its outlook for the year.
Sprint stock rose 54 cents, or 21.6 percent, to $3.07. The stock, which hit an all-time low last Wednesday, has been on a wild ride the last few days, jumping almost 15 percent Friday and then falling 12 percent Monday, when Sprint said it had cut about 2,500 jobs since last fall, or 8 percent of its staff.
BUMPY LANDING: Lockheed Martin said it will acquire the engineering company Leidos, combine it with its information systems and global solutions unit, and then separate that company so it can focus on its remaining aerospace and defense business. The stock shed $2.83, or 1.3 percent, to $208.18.
BONDS: The yield on the 10-year Treasury note slipped to 2 percent from 2.01 percent and the yield on the two-year Treasury note dipped to 0.84 percent. In the last week the yields on those two bonds have gotten closer than they’ve been since June 2008, a sign that investors are concerned about economic growth.
“Fear is the biggest driver,” said Guy LeBas, chief fixed income strategist for Janney Capital. LeBas said investors are also anticipating weaker inflation and think the Federal Reserve will be more cautious about raising interest rates because the market has experienced so much turmoil this month.
U.S. government bonds get more popular with investors when the economy looks dicey, because the U.S. government is extremely likely to make good on its debt. Investors are willing to accept lower interest payments in return, because they care most about safety.
When yields on longer-term bonds like the 10-year bond fall toward the yield on short-term bonds it signals that investor expectations for the future have dimmed.
OVERSEAS: France’s CAC 40 rose 1.1 percent and Germany’s DAX picked up 0.9 percent. Britain’s FTSE 100 gained 0.6 percent. However Asian markets were hammered by Monday’s slide in oil prices, which can signal weak demand. The Shanghai Composite dropped 6.4 percent to finish at 2,749.78, the lowest since December 2014. Japan’s Nikkei 225 lost 2.4 percent to 16,708.90.
METALS: Gold rose $14.90, or 1.3 percent, to $1,120.20 an ounce and silver gained 31 cents, or 2.2 percent, to $14.564 an ounce. Copper picked up 1.9 cents to $2.158 a pound.
The price of gold has risen 5.8 percent this year. Only 13 stocks in the S&P 500 have made a bigger gain.
OTHER ENERGY TRADING: Wholesale gasoline rose 1.7 cents to $1.047 a gallon and heating oil gained 3.2 cents, or 3.5 percent, to 96.8 cents. Natural gas added 2.2 cents to $2.18 per 1,000 cubic feet.
CURRENCIES: The euro edged up to $1.0844 from $1.0837, and the dollar rose to 118.54 yen from 118.48 late Monday.
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Marley Jay can be reached at http://twitter.com/MarleyJayAP. His work can be found at http://bigstory.ap.org/journalist/marley-jay
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
