U.S. Stocks Higher, But Constrained by Energy Sector
October 12 2015 - 4:36PM
Dow Jones News
By Leslie Josephs and Christopher Whittall
U.S. stocks rose Monday, but a slide in oil prices dragged down
energy shares, keeping a lid on gains in other sectors.
The Dow Jones Industrial Average gained 47 points, or 0.3%, at
17132. The S&P 500 added 0.1% and the Nasdaq Composite rose
0.2%.
The Stoxx Europe 600 fell 0.3%.
U.S. crude-oil futures were down 4.5% at $47.39 a barrel.
Chevron Corp. was down 0.9% at $88.74.
The S&P Energy Index was down following a report from the
Organization of the Petroleum Exporting Countries, or OPEC, which
said member countries produced more oil last month than in
August.
UnitedHealth Group Inc. was the Dow's gainers, up 2.7% at
$122.51. Nike Inc. shares rose 1.2% at $126.43.
Shares of EMC Corp. were up 1.8% at $28.35 after news that Dell
Inc. and private-equity firm Silver Lake will buy the data storage
company for $67 billion in cash and stock.
Investors are now focused on corporate earnings, said Gordon
Charlop, managing director at Rosenblatt Securities.
"That's where the rubber meets the road for these companies," he
said, adding that investors will be zeroing in on how companies
have been affected by a strong U.S. dollar and low oil prices.
Trade Monday was quiet because of the Columbus Day holiday. The
U.S. bond market was closed.
Chinese shares logged strong gains amid stimulus measures from
Beijing. The Shanghai Composite gained 3.3% and Hong Kong's Hang
Seng Index rose 1.2%. Japan's markets were closed for a
holiday.
The moves come after a sharp rally in global stocks last week
that was spurred by a rebound in oil prices and the prospect of
continued accommodative policy from the U.S. Federal Reserve. Low
interest rates in the U.S. have boosted global stock markets over
the past several years.
Shares in European mining companies, energy companies and auto
makers have recovered this month after sharp drops in those
sectors. Concerns over a China slowdown and a drop in commodities
prices had battered mining firms, while the Volkswagen AG emissions
scandal has weighed on auto makers.
"They got oversold, and now they quite quickly got somewhat
overbought," said Graham Secker, European head of equity strategy
at Morgan Stanley.
In Europe, German utilities companies gained after a stress test
over the weekend showed they had adequate reserves for nuclear
decommissioning. Shares in RWE AG jumped more than 10%, while E. ON
SE climbed more than 6%. Auto makers also saw strong gains
following the China stimulus news, rising 1.5%.
Elsewhere, investors remained fixed on the outlook for U.S.
monetary policy.
At a meeting of the International Monetary Fund over the
weekend, central bank officials urged the Federal Reserve to
proceed with its rate increase in order to reduce uncertainty. Fed
Vice Chairman Stanley Fischer said Sunday that the U.S. central
bank is taking a cautious approach in light of developments
overseas and the effect of higher interest rates on emerging
markets.
"Markets are boosted by the prospect of no rate increase,
despite the fact that this suggests that the economy is therefore
weaker than previously thought," said Craig Erlam, senior market
analyst at Oanda.
Meanwhile, the third-quarter earnings season is set to continue
with major financial firms J.P. Morgan Chase & Co., Bank of
America Corp., Wells Fargo & Co., Citigroup Inc. and Goldman
Sachs Group Inc. due to report this week.
In currencies, the euro rose slightly against the dollar to
$1.1363.
Gold rose 0.9% to $1166.70 a troy ounce.
Write to Leslie Josephs at leslie.josephs@wsj.com and
Christopher Whittall at christopher.whittall@wsj.com
(END) Dow Jones Newswires
October 12, 2015 16:21 ET (20:21 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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