Oil-Price Jump Lifts Energy Stocks -- WSJ
April 27 2016 - 3:02AM
Dow Jones News
By Leslie Josephs and Nicole Friedman
Energy shares rose as U.S. oil prices settled at a new 2016 high
Tuesday, while major U.S. stock indexes drifted higher ahead of a
monetary-policy update from the Federal Reserve.
Investors don't expect the Fed to raise interest rates this
week, but they will look for hints about the strength of the U.S.
economy and whether officials might act in June.
U.S. oil futures settled at a five-month high as the dollar
weakened and traders bet on a continued decline in U.S. production.
U.S. oil prices have climbed 68% from a 13-year low reached in
February on expectations that production would decline in the U.S.
and elsewhere and that demand would remain robust. Still, there are
few signs that the global oversupply of crude oil is shrinking,
analysts say.
Light, sweet crude for June delivery rose $1.40, or 3.3%, to
$44.04 a barrel on the New York Mercantile Exchange, the highest
settlement since Nov. 10. Energy shares in the S&P 500 rose
1.4%, the most of any sector in the index.
The energy sector is up close to 12% this year but is down more
than 16% over the past 12 months. "You have to be a little cautious
in some of these energy names," said Bill Nichols, head of U.S.
equities at Cantor Fitzgerald.
The Dow Jones Industrial Average added 13.08 points, or 0.1%, to
17990.32. The S&P 500 rose 3.91 points, or 0.2%, to 2091.70.
Trading volume of 6.39 billion shares was below the daily average
for 2016.
"No one is rushing to the exits," said Gordon Charlop, managing
director at brokerage Rosenblatt Securities.
The tech-heavy Nasdaq Composite fell for a fourth session -- its
longest losing streak since January -- dropping 7.50 points, or
0.2%, to 4888.28.
Apple shares fell 8.2% in after-hours trading. The iPhone maker
reported its first drop in revenue since 2003 and iPhone sales fell
for the first time ever in the latest quarter.
Twitter shares were down 14% in postmarket trading after the
social-media company reported revenue below analysts' expectations
and issued a downbeat outlook for second-quarter revenue.
Procter & Gamble was the biggest laggard in the Dow,
dropping $1.86, or 2.3%, to $79.55, shaving nearly 13 points off
the index. The maker of household products such as Bounty paper
towels reported higher profit but issued a downbeat earnings
outlook.
Hershey fell 1.77, or 1.9%, to 89.60 after the candy maker said
its profit and revenue declined in the last quarter.
Whirlpool fell 6.61, or 3.6%, to 179.43 after the appliance
company posted lower profit.
Health-care shares in the S&P 500 slipped 0.4%. Eli Lilly
fell 1.67, or 2.1%, to 76.27 after the drugmaker cut its profit
forecast for the year.
The yield on the 10-year Treasury note rose for the seventh
consecutive session, to 1.931% Tuesday, from 1.902% on Monday, as
prices fell. The last time the yield settled above 2% was in late
January.
Meanwhile, many investors expect the Bank of Japan to ease
policy further Thursday amid a recent strengthening of the yen and
weakening of corporate sentiment and inflation expectations.
Japan's Nikkei Stock Average fell 0.5% Tuesday.
The Stoxx Europe 600 edged up 0.2%, with banks and energy
companies leading gains.
Write to Leslie Josephs at leslie.josephs@wsj.com and Nicole
Friedman at nicole.friedman@wsj.com
(END) Dow Jones Newswires
April 27, 2016 02:47 ET (06:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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