Stocks’ day mostly positive after big spike in oil prices
U.S. stock indexes closed mostly higher Wednesday after a sharp increase in crude oil prices helped drive market-leading gains for energy companies.
Banks and other financial stocks declined the most as bond yields headed lower, which translates into lower interest rates on loans and lower profits for banks.
The Dow Jones industrial average ended in the red, while the Standard & Poor’s 500 index and Nasdaq composite eked out modest gains. Two stocks rose for every one that fell on the New York Stock Exchange.
“After yesterday’s bounce back, you’re seeing a little sideways action today,” said Jeff Zipper, managing director at the Private Client Reserve of U.S. Bank.
The S&P 500 index added 2.56 points, or 0.1 percent, to 2,361.13. The Dow fell 42.18 points, or 0.2 percent, to 20,659.32. The Nasdaq composite index gained 22.41 points, or 0.4 percent, to 5,897.55.
Bond prices rose. The 10-year Treasury yield fell to 2.39 percent from 2.42 percent.
A day after Wall Street rallied on news that U.S. consumer confidence reached its highest level since 2000, the market got another dose of encouraging economic data Wednesday.
The National Association of Realtors said more people signed contracts to buy U.S. homes last month as warm weather and rising confidence appeared to encourage consumers to look for houses. The NAR’s pending home sales index climbed 5.5 percent in February to 112.3, its highest point since April and its second-highest point since 2006.
Investors are hoping that Congress and the White House will enact tax cuts and other business-friendly policy proposals promised by President Donald Trump during his campaign.
Those expectations helped lift the market in the weeks after the election last November.
But some of that investor optimism dimmed in recent weeks after the Trump administration’s bid to pass a bill intended to begin repealing the Affordable Care Act failed to win enough votes.
“It’s really wait-and-see with the focus back on Washington and tax reform,” Zipper said.
Outside of Washington, investors had their eye on the latest company earnings news. Investors bid up shares in several companies that posted solid quarterly results or outlooks.
RH, formerly Restoration Hardware, climbed 14.9 percent a day after the home furnishings and decor retailer reported stronger earnings. It added $5.68 to $43.68.
Verint Systems jumped 10 percent after the software company reported better-than-expected quarterly results.
Verint also said during a management conference call with analysts that it is possible that at some point it will split itself into two businesses, but noted it has no plans now to do that. Verint’s stock rose $3.95 to $43.50.
Traders also welcomed news of other corporate deals.
Exar surged 22.3 percent after MaxLinear agreed to buy the chipmaker for $13 per share, or $662 million. Shares in Exar gained $2.37 to $12.99. MaxLinear rose $1.55, or 5.8 percent, to $28.06.
Some companies’ quarterly report cards failed to impress traders.
Dave & Buster’s Entertainment fell 3.4 percent after the arcade and restaurant chain announced disappointing sales at older locations. The stock gave up $2.10 to $60.09.
Energy prices closed sharply higher as traders weighed remarks from Iran’s oil minister.
Oil prices climbed after Bijan Zanganeh said the recent production-cut deal will probably be extended, and fighting in Libya is affecting its oil industry.
Benchmark U.S. crude oil futures rose $1.14, or 2.4 percent, to close at $49.51 a barrel in New York. The contract rose 64 cents Tuesday.
Brent crude, used to price international oils, climbed $1.09, or 2.1 percent, to close at $52.42 a barrel in London.
Trader Anthony Riccio (left) and specialist Dilip Patel work Wednesday at the New York Stock Exchange. The major indexes ended the day mixed, with the Dow down, and the S&P and Nasdaq up.