Energy stocks rise but post worst week in nine months

Health care and technology remain the strong sectors.

U.S. stock indexes nudged higher Friday after energy companies clawed back some of their losses from earlier in the week.

After meandering up and down through the day, the Standard & Poor’s 500 rose 3.80 points, or 0.2 percent, to end at 2,438.30. The Dow Jones industrial average edged down 2.53 points, or less than 0.1 percent, to 21,394.76, and the Nasdaq composite gained 28.56, or 0.5 percent, to 6,265.25. More than twice as many stocks rose than fell on the New York Stock Exchange.

Energy stocks led the way, and those in the S&P 500 climbed 0.8 percent for the largest gain of the 11 sectors that make up the index.

Rising prices for oil and natural gas drove the gains. Benchmark U.S. crude added 27 cents to settle at $43.01 per barrel. Brent crude, the international standard, gained 32 cents to $45.54 and natural gas rose 4 cents, or 1.2 percent, to $2.93 per 1,000 cubic feet.

EQT, a producer of natural gas and crude, had the day’s biggest gain in the S&P 500 and jumped $4.16, or 8 percent, to $56.19. Cabot Oil & Gas climbed 88 cents, or 3.8 percent, to $23.74.

Friday’s gains, though, weren’t enough to keep energy stocks from closing out their worst week in nine months. They had earlier sunk four straight days as oil dropped to its lowest price since August on expectations that the world has more crude supplies than users need. Energy stocks lost 2.9 percent over the course of the week.

What kept broad indexes afloat for the week were big gains for health care and technology stocks. The S&P 500 rose 0.2 percent for the week.

Health care stocks climbed as the Senate unveiled its proposal to revamp how Americans get medical care. Technology companies, meanwhile, are forecast to report strong growth in the upcoming earnings season, and Oracle’s profit report Wednesday sailed past analysts’ expectations.

“In terms of the overall market, what you really worry about with oil is what it does to earnings,” said Steve Chiavarone, portfolio manager at Federated Investors. A big pickup in corporate profits has been one of the main reasons for the stock market’s continued climbs this year, and energy companies had been forecast to provide some of the strongest growth in 2017.

With the price of oil about 15 percent below where it was a year ago, energy companies’ profits may be at risk. But as long as oil’s price can hold close to where it is, “that’s good enough given that there’s corporate profit growth everywhere else,” Chiavarone said.

Friday’s biggest decliner in the S&P 500 was Bed Bath & Beyond, which reported weaker earnings for the latest quarter than analysts expected. The retailer’s revenue also fell short of Wall Street’s forecasts. Its shares fell $4.09, or 12.1 percent, to $29.65.

Bond prices were little changed, and yields held relatively steady. The 10-year Treasury yield dipped to 2.14 percent from 2.15 percent late Thursday. The twoyear yield was flat at 1.34 percent, and the 30-year yield held at 2.72 percent.

The dollar slipped to 111.26 Japanese yen from 111.34 yen late Thursday. The euro rose to $1.1199 from $1.1147, and the British pound rose to $1.2722 from $1.2672. but on Friday the natural resources and real estate development company said its board had determined that the new offer from D.R. Horton constituted a “superior proposal,” as defined in Forestar Group’s merger agreement with Starwood Capital Group.

Forestar said on Friday its board has informed Starwood that it intends to terminate the initial merger agreement and sign a deal with D.R. Horton under the homebuilder’s new offer. Forestar Group said, however, that it will continue to “discuss and negotiate with Starwood in good faith” until Wednesday.

Forestar Group said “there is no assurance that the transactions with either Starwood or D.R. Horton will be completed.”

Starwood Capital Group, an investment firm with a focus on real estate, manages assets of more than $51 billion, according to the company. Fort Worth-based D.R. Horton is the nation’s largest homebuilder.

Forestar Group was spun off from the former Temple-Inland Inc. in 2007. Through the years Forestar Group has operated in real estate, oil and gas and other natural resources. It currently operates largely as a residential and mixeduse real estate development company. It owns interests in 50 residential and mixed-use projects comprising 4,600 acres of real estate.

The company has been reshaping itself since 2015, when a group of key investors said Forestar needed to make changes in both its management strategy and in its leadership. In September 2015, the company named Phil Weber as its chief executive officer.

Forestar Group announced in February that it had reached a deal to sell off substantially all of its remaining oil and gas assets for $85.6 million, continuing its divestiture of holdings outside its main residential and mixeduse development portfolio. The company in 2016 sold the Radisson Hotel and Suites in downtown Austin in a $130 million deal.