Led by oil, rising energy stocks help send S&P 500 to record
Associated Press
NEW YORK — A spurt in oil prices Monday revived energy stocks, which have been among the year’s worst performers, and helped push the broader market back to record highs.
The Standard & Poor’s 500 index climbed 11.42 points, or 0.5 percent, to 2,402.32, edging past its prior record set last week.
The Dow Jones industrial average gained 85.33 points, or 0.4 percent, to 20,981.94, the Nasdaq composite gained 28.44, or 0.5 percent, to 6,149.67, and the Russell 2000 index of smaller stocks rose 11.15 points, or 0.8 percent, to 1,393.92.
Energy stocks helped lead the way after the price of oil jumped on expectations that the global glut of crude may ease.
A wide group of oil-producing countries has already cut production in hopes of supporting the price of oil, and Russia and Saudi Arabia said they want to extend the cuts through the first three months of 2018. Benchmark U.S. crude rose $1.01, or 2.1 percent, to settle at $48.85 per barrel. Brent crude, the international standard, rose 98 cents to $51.82 a barrel. The price of oil has swung sharply in recent years, from more than $100 three years ago to less than $30 last year, as concerns wax and wane that supplies will overwhelm demand.
Monday’s rise for crude helped oil field services provider Halliburton jump $1.37, or 3 percent, to $46.51 for one of Monday’s biggest gains in the S&P 500. Energy companies across the index rose 0.6 percent.
Companies that produce metals and other basic materials, along with financial stocks, were also strong.
The day’s rally continued a calm push higher for stocks in recent weeks. Markets around the world have been making modest, methodical gains as investors shrug off a long list of potential concerns.
South Korean stocks rose Monday even after North Korea launched a missile over the weekend and its leader promised more missile tests. The worldwide “ransomware” cyberattack spread Monday, which sent cybersecurity stocks higher, while politicians in Washington wonder whether Republicans’ odds of implementing tax cuts and other pro-business policies have diminished.
For the most part, signs of a strengthening global economy and improving corporate profits have been enough to allay investors’ fears and push markets to new heights. Profits have been rallying not only in the United States but also in Europe and other areas that have been struggling for years.
The recent run of calmness is a turnaround from the start of last year, when twitchy investors were quick to sell on worries about the global economy.
“We do really see this prevailing sense of complacency,” said Jon Adams, senior investment strategist at BMO Global Asset Management. “I don’t think we see any dark clouds on the horizon, but I wouldn’t be surprised to see a 5 to 10 percent drawdown from now to year-end.”
Mr. Adams expects corporate profits to keep improving, which should help support stocks, but he pointed to several events that could jolt markets: uncertainty on the Korean peninsula and in Washington and upcoming elections in the United Kingdom, France and potentially Italy.