Stocks up de­spite slump in en­ergy

Los Angeles Times - - REAL ESTATE -

En­cour­ag­ing eco­nomic news pushed stocks higher Wed­nes­day, although a slump in en­ergy com­pa­nies and util­i­ties kept broader gains in check.

Stocks climbed from the start of trad­ing on news that U.S. ex­ports rose in April and that hir­ing picked up in May. The buy­ing fol­lowed a rise in over­seas mar­kets on hopes of a break­through in Greece’s talks with its cred­i­tors.

By the end of the day, seven of 10 in­dus­try groups in the Stan­dard & Poor’s 500 in­dex rose. Util­ity stocks dropped 1.4% and en­ergy com­pa­nies fell 0.7%, along with the price of oil.

The S&P 500 edged up 4.47 points, or 0.2%, to 2,114.07. The Dow Jones in­dus­trial av­er­age rose 64.33 points, or 0.4%, to end at 18,076.27. The Nasdaq com­pos­ite climbed 22.71 points, or 0.5%, to 5,099.23.

The Fed­eral Re­serve said a sur­vey of busi­ness con­di­tions showed that man­u­fac­tur­ing held steady or in­creased in most parts of the coun­try. A sep­a­rate report from the In­sti­tute for Sup­ply Man­age­ment showed U.S. ser­vice firms grew in May at the slow­est pace in a year. But any read­ing over 50 in­di­cates that ser­vices firms are ex­pand­ing.

In­vestors are anx­ious for signs that U.S. growth is pick­ing up, but not so much that the Fed will feel com­pelled to raise in­ter­est rates too fast and send stocks down sharply.

Util­ity com­pa­nies were driven down by a sharp rise in bond yields. In­vestors like util­ity stocks for their fat div­i­dends, but bonds are be­com­ing more at­trac­tive as a source of in­come. The yield on the 10-year Trea­sury note rose Wed­nes­day to 2.37%, the high­est since Novem­ber.

En­ergy stocks fell as the price of bench­mark U.S. oil slid nearly 3%. The two big­gest de­clin­ers in the S&P 500, Ch­e­sa­peake En­ergy and Di­a­mond Offshore Drilling, each fell more than 3%.

Among big gain­ers for the day was cloth­ing maker G-III Ap­parel Group, which re­ported earn­ings and rev­enue that came in well ahead of what Wall Street an­a­lysts were look­ing for. Its stock surged $7.06, or 12%, to $67.15.

Bench­mark U.S. crude fell $1.62 to close at $59.64 a bar­rel in New York. Brent crude, a bench­mark for in­ter­na­tional oil used by many U.S. re­finer­ies, fell $1.69 to close at $63.80 in Lon­don.

In other fu­tures trad­ing on the NYMEX, whole­sale gaso­line fell 2 cents to close at $2.045 a gal­lon, and nat­u­ral gas fell 6.4 cents to close at $2.634 per 1,000 cu­bic feet.

Gold fell $9.50, or nearly 1%, to $1,184.90 an ounce.

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