Daily Local News (West Chester, PA)
Technology, energy lift stocks
NEW YORK » Big gains for technology and health care companies helped U.S. stocks set records again Wednesday. Rising crude and heating oil prices also sent energy companies higher.
Chipmakers including Nvidia and Advanced Micro Devices made big gains while Intel skidded following news that its processors have a security flaw that could slow down computers. Energy company Scana, which plunged after it canceled a $9 billion nuclear project and started raising rates to cover its costs, jumped after Dominion Energy agreed to buy it for $7.9 billion in stock.
Energy companies jumped for the second day in a row as oil prices, already at two-and-a-halfyear highs, rose again. One reason is that after a pipeline bombing in Libya last month and ongoing anti-government protests in Iran, investors are concerned that oil supplies will get interrupted.
“Something that’s coming back into the market which we’ve been missing over the last few years is this geopolitical risk premium,” said Nick Koutsoftas, portfolio manager at Cohen & Steers. Investors didn’t worry that much about those risks in recent years because big stockpiles of oil had built up. Those stockpiles are shrinking now, which has helped oil prices but also made them more vulnerable to surprises.
The Standard & Poor’s 500 index rose 17.25 points, or 0.6 percent, to 2,713.06. The Dow Jones
industrial average added 98.67 points, or 0.4 percent, to 24,922.68. The Nasdaq composite climbed 58.63 points, or 0.8 percent, to 7,065.53. The Russell 2000 index of smaller-company stocks gained 2.56 points, or 0.2 percent, 1,552.58. All four finished at record highs.
Benchmark U.S. crude added $1.26, or 2.1 percent, to $61.63 a barrel in New York. Brent crude, used to price international oils, picked up $1.27, or 1.8 percent, to $67.84 a barrel in London.
Heating oil and natural gas prices have also climbed as severe cold gripped much of the U.S. Heating oil rose 3 cents to $2.09 a gallon, and it’s up 12 cents since Dec. 22. Natural gas slid 5 cents to $3.01 per 1,000 cubic feet, and it’s up 34 cents over that time.
In other commodities trading, wholesale gasoline added 3 cents to $1.80 a gallon.
Technology companies rose further. Chipmaker Nvidia gained $13.12, or 6.6 percent, to $212.47. Alphabet, Google’s parent company, climbed $18.31, or 1.7 percent, to $1,091.52. IBM added $4.24, or 2.7 percent, to $158.49.
Intel slumped after British technology site The Register reported a security problem that affects Intel’s processors, and said fixing the problem could slow down computers that use them. Intel said it’s working to patch the problem and the average computer user won’t experience a significant slowdown as the flaw is fixed. It also said the problem is not limited to its products.
Its stock lost $1.59, or 3.4 percent, to $45.26 in the highest trading volume in more than four years. Other chipmakers traded higher, but analysts weren’t sure the problem could threaten Intel’s sales
Dominion Energy agreed to buy Scana in a deal that expands the Richmond, Virginia-based company’s business in the Carolinas. Dominion Energy is valuing the deal at about $7.9 billion plus $6.7 billion in debt. Scana soared $8.78, or 22.6 percent, to $47.65 and Dominion dropped $3.09, or 3.8 percent, to $77.19.
Scana traded above $70 a share in June but plunged after Scana and partner Santee Cooper said they were abandoning construction of two nuclear reactors. They blamed the project failure on the bankruptcy of contractor Westinghouse. The end of the project and Scana’s rate hikes led to harsh criticism and multiple government investigations, and the heads of both Scana and Santee Cooper both stepped down.
Bond prices rose after a sharp drop the day before. The yield on the 10-year Treasury note fell to 2.45 percent from 2.46 percent.