Energies Lead Modest US Stock Gains 03/18 16:11
U.S. stock indexes finished modestly higher Monday, extending the market's
solid gains from a rally last week.
(AP) -- U.S. stock indexes finished modestly higher Monday, extending the
market's solid gains from a rally last week.
Energy companies notched the biggest gains 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.
Financial, consumer goods and technology stocks accounted for much of the
gains. Goldman Sachs rose 2.1 percent, Advance Auto Parts climbed 4.4 percent
and Microsoft added 1.4 percent.
Those gains outweighed losses in communications and health care sector
companies. Facebook slid 3.3 percent and Boston Scientific dropped 5.6 percent.
Stocks were riding the momentum from last week, when the S&P 500 resumed its
torrid start to the year following a brief, five-day stumble. The index is back
to within 3.5 percent of its record high, set in September, after clawing back
all of its terrifying drop from December.
The market's latest gains come as investors wait for a resolution of the
costly trade war between the U.S. and China. After several weeks of
negotiations, it's not clear how close the two sides are to an agreement. A
meeting between President Donald 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 on Wednesday.
"In many ways, the market is in limbo," said Sam Stovall, chief investment
strategist at CFRA. "And in the meantime, (investors) are waiting for some sort
of agreement on the trade talks as well as the Fed."
The S&P 500 gained 10.46 points, or 0.4 percent, to 2,832.94. The benchmark
index is now up 13 percent 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 percent, to
The Nasdaq composite added 25.95 points, or 0.3 percent, to 7,714.48. The
Russell 2000 index of smaller-company stocks picked up 10.39 points, or 0.7
percent, to 1,563.93.
Major stock indexes in Europe finished mostly higher.
U.S. stocks have had a strong showing this year, with all the major indexes
showing a gain of at least 11 percent.
One key to the recent rally has been the belief that the Federal Reserve
will slow its pace of increases for interest rates. 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.
"The expectations are that the Fed won't do anything in the first half of
the year," Stovall said.
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 of bonds after the 2008 financial
crisis to keep interest rates low and support markets, but it's been slowly
letting some roll off as they mature. Investors want to know how much the Fed
will ultimately hold onto, 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 percent to settle at $59.09 a barrel, while
Brent crude gained 0.6 percent to close at $67.54 a barrel.
Energy stocks got a boost from the pickup in oil prices. National Oilwell
Varco jumped 6.2 percent, Halliburton gained 3.2 percent and Marathon Petroleum
rose 2.7 percent.
Investors also bid up shares in Worldpay 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
Worldpay's U.S.-listed shares jumped 10 percent. Fidelity National, also
called FIS, slipped 0.7 percent.
Edwards Lifesciences vaulted 6.2 percent 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. The stock declined 1.8 percent, following its
10.3 percent loss last week.
Bond prices fell. The yield on the 10-year Treasury rose to 2.61 percent
from 2.59 late Friday.
The dollar fell to 111.41 Japanese yen from 111.48 yen on Friday. The euro
strengthened to $1.1338 from $1.1320.
Gold fell 0.1 percent to $1,301.50 an ounce, silver was little changed at
$15.32 an ounce and copper added 0.1 percent to $2.91 a pound.
In other energy futures trading, wholesale gasoline climbed 1.4 percent to
$1.88 a gallon, heating oil added 0.1 percent to $1.97 a gallon and natural gas
picked up 2 percent to $2.85 per 1,000 cubic feet.
AP Business Writer Yuri Kageyama contributed from Tokyo.