Stocks open higher, led by energy sector as oil price rises
(about 1 hour later)
TOKYO — Global stock markets slipped Tuesday, led by a plunge in China’s Shanghai index, after a renewed slump in the price of oil kept investors on edge about the world economy.
NEW YORK — Higher oil prices and some positive earnings news from U.S. companies are helping to send the stock market higher in early trading.
KEEPING SCORE: France’s CAC 40 fell 0.1 percent to 4,308.74 and Germany’s DAX lost 0.3 percent to 9,708.48. Britain’s FTSE 100 slipped 0.4 percent to 5,851.19. U.S. shares were set to drift lower, with Dow futures slipping 0.2 percent and S&P 500 futures down 0.1 percent.
Energy stocks were leading the early gains on Wall Street Tuesday as the price of oil rose 1 percent to $30 a barrel.
ASIA’S DAY: The Shanghai Composite dropped 6.4 percent to finish at 2,749.78, the lowest since December 2014, when the index was beginning a rally that peaked last June. Japan’s Nikkei 225 lost 2.4 percent to 16,708.90. South Korea’s Kospi slipped 1.2 percent to 1,871.69. Hong Kong’s Hang Seng was down 2.6 percent at 18,831.87. Other regional markets were also mostly down.
In earnings news, 3M rose 4 percent and specialty glass maker Corning increased 2 percent after reporting results that were better than analysts were expecting.
OIL CONCERNS: Plunging oil prices have been hitting profits at energy companies and getting investors worried the fall in energy costs could add to deflationary pressures in major economies. Slower growth in China is one reason for oil prices to fall. The slide also reflects oversupply including new sources of production such as shale oil in the U.S. Oversupply is set to be compounded by the lifting of sanctions on Iran, allowing it resume oil exports.
The Dow Jones industrial average rose 127 points, or 0.8 percent, to 16,018 in early trading.
CHINA FACTOR: In China, investors were in near-panic in the absence of a shift in government policies and economic fundamentals, according to Chen Yong, market strategist for Lianxun Securities. The approach of the Lunar New Year didn’t help, as players become reluctant to invest for fear of any unexpected sharp falls in overseas markets.
The Standard & Poor’s 500 index climbed 10 points, or 0.5 percent, to 1,886. The Nasdaq composite added six points, or 0.1 percent, to 4,524.
THE QUOTE: “It’s just another in a long series of slumps that we have seen in this market, and it’s not the last we will see either because the market is still overpriced. And too many people want to get their money out. It’s been a bubble since it began last summer,” said Michael Every, who heads Financial Markets Research, Asia-Pacific, at Rabobank. He expects another 10 percent drop or more in Shanghai shares before things settle down.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.02 percent.
ENERGY: Benchmark U.S. crude was down 15 cents at $30.19 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.85 on Monday. Brent crude, a benchmark for international oils, lost 13 cents to $31.13 a barrel in London. It fell $1.68 the previous day.
CURRENCIES: The dollar edged up to 118.30 yen from 118.23 yen in the previous trading session. The euro slipped to $1.0841 from $1.0850.
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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.
