By Saumya Vaishampayan
U.S. stock futures rose Wednesday, boosted by energy shares as
U.S. oil prices hit fresh five-month highs.
S&P 500 futures added four points, or 0.2%, to 2088. E-mini
Dow futures rose 50 points, or 0.3%, to 17914. E-mini Nasdaq-100
futures gained three points, or 0.1%, to 4411. Changes in stock
futures don't always accurately predict moves in the stock market
after the opening bell.
Stock futures remained higher after a disappointing report on
private-sector employment. Private payrolls in the U.S. increased
by 169,000 in April, according to a report compiled by payroll
processor Automatic Data Processing Inc. and forecasting firm
Moody's Analytics. Economists surveyed by The Wall Street Journal
had expected an increase of 205,000 jobs.
Crude-oil futures gained for the second straight session, up
2.3% to $61.81 a barrel, their highest level since December. Oil
prices have surged 42% from their 2015 settlement low of $43.46 on
March 17.
Oil prices buoyed energy stocks in premarket trading. Chevron
Corp. was among the biggest gainers in the Dow industrials, up
nearly 1% premarket. In the S&P 500, Transocean Ltd. rose 2.3%
premarket.
"Oil prices have shot up pretty quickly," said David O'Malley,
chief executive of Penn Mutual Asset Management, which has $20
billion under management.
"This increase back to $60 a barrel alleviates some of the
fears" about what low oil prices could mean for the fracking
industry and more levered energy companies, he added.
Mr. O'Malley said he expected stocks to decline for the year.
"Due to stretched valuations and ultimately rising interest rates,
stocks will have a hard time moving higher and will probably move a
little lower," he said. Still, he expects stocks of energy, metals
and mining companies to outperform the S&P 500.
Stocks fell Tuesday, with the Dow pulling back 0.8% to 17928.20.
The S&P 500 declined 1.2% to 2089.46, giving up most of its
gains from a two-day winning streak ended Monday. For the year, the
Dow is up just 0.6% and the S&P has gained 1.5%, through
Tuesday's close.
European stocks rose, with Germany's DAX up 0.5% and France's
CAC 40 gaining 0.4%. Concerns about Greece's financial situation
continued to weigh on government bonds. While Greece made a EUR200
million ($224 million) interest payment to the International
Monetary Fund on Wednesday, on schedule, the country has a much
bigger EUR750 million repayment deadline on May 12.
In commodity markets, gold futures added 0.2% to $1195.40 an
ounce. Treasury prices fell, pushing the 10-year yield up to 2.193%
from 2.174% on Tuesday.
Investors continued to watch first-quarter earnings. Chesapeake
Energy Corp. said Wednesday it swung to a loss in the first quarter
as the shale driller took a $3.6 billion write-down. Excluding the
impairment and other special charges, profit came in above
expectations. Shares rose 1.5% premarket.
Mylan NV said Tuesday its revenue rose a less-than-expected 9%,
as foreign currency and acquisition costs weighed on results. The
company affirmed its full-year outlook. Shares rose 1.2%
premarket.
In other corporate news, Alexion Pharmaceuticals Inc. has agreed
to buy Synageva BioPharma Corp. in a cash-and-stock deal valued at
$8.4 billion. Alexion shares fell 1.6%, while those of Synageva
surged 131% in premarket trading.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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