Stocks edge up as oil gives back half of big gain

U.S. stock indexes ticked closer to record heights Tuesday, and their modest moves belied plenty of churning underneath.

Oil prices and energy stocks slumped, giving back nearly half of their huge gains from the day before. Shares of tech firms and companies that sell products to consumers climbed. Treasury yields fell a second straight day as the Federal Reserve opened a two-day meeting on interest rates; investors expect the Fed to announce an interest-rate cut Wednesday for the second time in as many months.

The Standard & Poor’s 500 index rose 7.74 points, or 0.3%, to 3,005.70. It’s within 0.7% of the record high it set in July.

The Dow Jones industrial average edged up 33.98 points, or 0.1%, to 27,110.80. The Nasdaq composite rose 32.47 points, or 0.4%, to 8,186.02.

“We’re drifting here a little bit,” said David Joy, chief market strategist at Ameriprise Financial. “It’s interesting to me, and somewhat encouraging, that the market has held up near its all-time highs despite all these concerns.”

The newest of those concerns arrived this past weekend, when an attack on a Saudi Arabian oil facility raised the risk of major disruptions to the world’s oil supply. Crude prices surged more than 14% on Monday.

But benchmark U.S. crude slumped $3.56 to $59.34 a barrel Tuesday. Saudi Arabia’s energy minister said that half of the production halted by the attack has already been restored. Brent crude, the international standard, fell $4.47 to $64.55 a barrel.

Energy stocks in the S&P 500 slid 1.5%. Marathon Oil shares dropped 7.8%. Oilfield services provider Halliburton declined 6.5%.

The drop in oil helped companies carrying big fuel bills recoup some of their sharp losses from the day before. American Airlines Group rose 3.1%, clawing back about 40% of its Monday decline.

Technology stocks made modest gains. Microsoft rose 0.8%. Micron Technology climbed 1.4%.

Investors still largely expect the Fed to cut shortterm interest rates by a quarter of a percentage point Wednesday. The central bank cut rates in late July for the first time in more than a decade as it tries to shield the United States from the pain of a slowing global economy and the effects of the U.S.-China trade war.

Several economic reports have come in recently that are “good enough” to mean it’s no longer a slamdunk that the Fed will cut rates Wednesday, Ameriprise’s Joy said. Tensions in the U.S.-China trade war have seemed to diminish a bit recently, and representatives from Washington and Beijing are scheduled to talk next month. But Joy and many others still expect the Fed to cut rates Wednesday and perhaps again later this year, similar to the trio of cuts it implemented in 199596 and again in 1998 as part of a “mid-cycle adjustment” in the 1991-to-2001 economic expansion.

The yield on the 10-year Treasury fell to 1.80% from 1.84%. The two-year yield, which is more heavily influenced by changes in Fed policy, fell to 1.72% from 1.75%.

Wholesale gasoline fell 8 cents to $1.68 a gallon. Heating oil fell 9 cents to $1.99 a gallon. Natural gas fell 1 cent to $2.67 per 1,000 cubic feet.

Gold rose $1.90 to $1,513.40 an ounce, and silver rose 11 cents to $18.14 an ounce. Copper fell 1 cent to $2.63 a pound.

The Hang Seng index in Hong Kong fell 1.2% after credit-rating firm Moody’s downgraded Hong Kong, citing its political turmoil.