Stocks up despite slump in energy
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.