Financial Markets: Stock indexes manage tiny gains, led by energy sector
NEW YORK >> Stocks closed slightly higher on Wall Street, led by energy companies as the price of crude oil turned sharply higher.
Murphy Oil jumped 5 percent Friday, and offshore drilling company Transocean gained 3 percent.
The price of benchmark U.S. crude rose more than 6 percent in New York.
Gap plunged 14 percent after reporting big drops in March sales. Other retailers also fell.
The Dow Jones industrial average rose 35 points, or 0.2 percent, to 17,576.
The Standard & Poor's 500 index climbed four points, or 0.2 percent, to 2,046. The Nasdaq composite added two points, or 0.1 percent, to 4,850.
Bond prices fell. The yield on the 10-year Treasury note rose to 1.72 percent.
Stocks were coming off their biggest loss in six weeks and started the day with big gains. Early in the day the Dow rose as much as 152 points.
Benchmark U.S. crude rose $2.46, or 6.6 percent, to $39.72 a barrel in New York. Brent crude, used to price international oils, gained $2.51, or 6.4 percent, to $41.94 a barrel in London.
ConocoPhillips picked up 70 cents, or 1.7 percent, to $41.01 and Murphy Oil advanced $1.22, or 5 percent, to $25.66.
Oil prices dropped seven percent last week and gained it all back this week as the dollar got weaker. Steve Chiavarone, associated portfolio manager for Federated Investors, said the dollar has slipped as the Federal Reserve has stressed that it will only raise interest rates slowly. That makes the dollar weaker, and investors think that means demand will go up.
Chiavarone said investors are also hoping that major oil-producing nations will agree to freeze production levels later this month. But he said they may be disappointed.
"If this fizzles out in a week or so I think you could see oil prices roll over" and fall to around $30, he said.
Falling into the gap
Gap plunged $3.82, or 13.8 percent, to $23.87 after it said all three of its big chains saw their sales drop in March. The company behind Gap, Old Navy and Banana Republic also said its levels of product inventory are high, which could lead to bigger discounts that will hurt its profits.
L Brands said it will restructure its Victoria's Secret brand and eliminate about 200 corporate jobs. Its stock lost $3.74, or 4.4 percent, to $80.41.
Those announcements hurt companies that sell everything from clothing for teens to handbags and department store chains. Macy's gave up $1.24, or 3.1 percent, to $39.38. Under Armour lost $1.48, or 3.3 percent, to $42.93.
Analyst Simeon Siegel of Nomura Securities said Gap and L Brands reported decent sales, and their problems don't suggest big trouble for retailers in general.
"Everything gets lumped in together," he said. However, he added that retail stocks have made big gains recently.
"For the past few weeks we've had this incredibly rally that really wasn't predicated on any results," he said.
Pain drug maker Depomed is rising after activist investment firm Starboard Value disclosed a 9.8 percent stake in the company, making it one of Depomed's largest shareholders. Last year Horizon Pharma tried to buy Depomed for about $1.1 billion, or $33 per share, but Depomed fended off that effort and Horizon dropped it in November. Depomed's stock jumped $1.92, or 12.8 percent, to $16.92.
Biotech drug companies are falling. Regeneron Pharmaceuticals lost $14.07, or 1.6 percent, to $404.41 and Vertex Pharmaceuticals shed $1.40, or 1.6 percent, to $84.90. Biogen declined $2.86, or 1 percent, to $270.18.
Biotech stocks logged their biggest gain in almost five years on Wednesday, but they have suffered big losses since July.
Specialty glass maker Corning said it will buy optical components maker Alliance Fiber Optic Products for $18.50 per share, or $305 million. Alliance stock surged $3.02, or 19.5 percent, to $18.48. Corning dipped 20 cents to $20.46.
Ruby Tuesday tumbled 66 cents, or 12.6 percent, to $4.56. The restaurant chain's earnings were disappointing and it cut its forecasts. The company also said its chief financial officer will leave to take a job with another company.
Wholesale gasoline rose 8 cents, or 6 percent, to $1.46 a gallon. Heating oil jumped 7 cents, or 6.6 percent, to $1.20 a gallon. Natural gas slipped 3 cents to $1.99 per 1,000 cubic feet.
The price of gold rose $6.30 to $1,242.50 an ounce. Silver gained 23 cents, or 1.5 percent, to $15.38 an ounce. Copper edged up 1 cent to $2.02 a pound.
Bond prices fell. The yield on the 10-year U.S. Treasury note rose to 1.72 percent from 1.69 percent. The dollar rose to 108.37 yen from 108.24 yen. The euro inched up to $1.1404 from $1.1377.
Stocks in Europe also rallied. France's CAC 40 rose 1.4 percent and the FTSE 100 in Britain climbed 1.1 percent. Germany's DAX added 1 percent. Japan's benchmark Nikkei 225 index finished 0.5 percent higher. South Korea's Kospi dipped 0.1 percent. Hong Kong's Hang Seng rose 0.5 percent.
TALK TO US
If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.