Oil prices jump; tech stocks rise

U.S. stocks made modest gains and set more records Monday as upheaval in oilrich Saudi Arabia sent crude oil prices to two-year highs. Chip makers and media companies climbed on deal reports. Phone and household goods companies, on the other hand, sank.

U.S. crude oil reached its highest price since mid-2015 after dozens of Saudi princes, senior officials and businessmen were arrested as part of a purported corruption investigation.

Saudi Arabia is the world’s largest exporter of oil, and investors wondered whether the tumult would constrict oil supplies and drive up prices.

Energy companies’ shares jumped, with drilling companies making some of the biggest gains.

Chip makers surged after Broadcom offered to buy competitor Qualcomm for $105 billion, which, if it’s completed, would be the largest technology acquisition ever.

Wireless carriers Sprint and T-Mobile tumbled after they called off merger talks over the weekend, and reports that Sprint’s owner, Japanese conglomerate SoftBank, might buy cable company Charter hammered shares of telecom giants AT&T and Verizon, which might face tougher competition.

Companies that make and sell household goods slumped on weak quarterly results from CVS Health and food distributor Sysco.

Broadcom shares rose 1.4% to $277.52. Qualcomm rose 1.1% to $62.52.

Broadcom’s offer to buy Qualcomm wasn’t the only potential chip tie-up in the news. After the Wall Street Journal reported that Marvell Technologies is in talks to buy Cavium, Cavium jumped 12% to $76.43 and Marvell climbed 9.1% to $20.20.

Also, chip maker Advanced Micro Devices rose 7.3% to $11.93 after it said it would work with Intel to make a new graphics processor unit.

Sprint dived 11.5% to $5.90 and T-Mobile sank 5.7% to $55.54 after they dashed investors’ hopes that they would finally combine.

Verizon dropped 4% to $45.53 and AT&T slid 1.3% to $32.86 on news of SoftBank’s interest in Charter. CNBC reported on those discussions Monday, and the New York Post said last week that the companies had recent talks about a deal.

Combining Sprint with Charter, the country’s second-largest cable company, could mean cost savings, deeper pockets and a combined wireless-home internet company that could act as a stronger competitor to AT&T and Verizon.

Anthem climbed 2.1% to $216.30 after the health insurer named UnitedHealth executive Gail Boudreaux as its next chief executive.

Michael Kors Holdings soared 14.7% to $54.62. The luxury retailer raised its annual forecast after a strong quarterly report.

U.S. crude oil surged $1.71, or 3.1%, to $57.35 a barrel in New York. Brent crude, the international standard, rose $2.20, or 3.5%, to $64.27 a barrel in London.

Doug Coté, chief market strategist for Voya Investment Management, said he is skeptical that any problems in Saudi Arabia will lead to higher oil prices because he thinks American companies will drill for more oil if prices stay where they are. That would increase supplies and push prices down.

With international tumult in the news, investors bought gold and government bonds. Gold rose $12.40 to $1,281.60 an ounce. Silver rose 40 cents to $17.24 an ounce. Copper rose 4 cents to $3.16 a pound.

The yield on the 10-year Treasury note slipped to 2.32% from 2.33%.

Wholesale gasoline rose 4 cents to $1.83 a gallon. Heating oil rose 6 cents to $1.94 a gallon. Natural gas jumped 15 cents to $3.13 per 1,000 cubic feet.

The dollar fell to 113.77 yen from 114.16 yen. The euro rose to $1.1606 from $1.1608.