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US: Dow, S&P 500 edge higher as oil shares rally

Wednesday, June 8, 2016 - 06:58
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[NEW YORK] Petroleum-linked shares rallied on Tuesday, lifting the Dow and S&P 500 after US oil prices closed above US$50 a barrel for the first time since July.

Dow members Chevron and ExxonMobil climbed 2.1 per cent and 1.5 per cent as supply disruptions in Nigeria propelled the oil market to fresh multi-month highs.

But the Nasdaq finished modestly lower after two biotech companies, Biogen and Alexion Pharmaceuticals, reported disappointing clinical results on treatments to address multiple sclerosis and a neuromuscular disease called MG, respectively. Biogen slumped 12.8 per cent and Alexion 10.9 per cent.

Valeant Pharmaceuticals International, another Nasdaq-traded drug company, plunged 14.6 per cent after reporting a loss of US$373.7 million in the first quarter and projecting full-year earnings well below analyst expectations.

The Dow Jones Industrial Average added 0.1 per cent at 17,938.28.

The broad-based S&P 500 rose 0.1 per cent to 2,112.13, while the tech-rich Nasdaq Composite Index shed 0.1 per cent to 4,961.75.

Ralph Lauren shed 2.4 per cent as it announced sweeping restructuring plans aimed at generating annual cost savings of US$180 to US$220 million from store closures and other measures. It projected lower net sales for fiscal 2017 due to these steps.

Credit Suisse said Ralph Lauren's outlook implies earnings will be weak into fiscal 2018, resulting in lower profits three years in a row. "The way forward .... is long and fraught with challenges," it said in a note.

Online real estate listings company Zillow advanced 5.7 per cent on news it reached a settlement to pay rival Move US$130 million over accusations that Zillow had misappropriated trade secrets. Some analysts had expected a larger payout.

Tesla Motors gained 5.3 per cent after billionaire shareholder Ron Baron told CNBC he thought the company could become one of the world's biggest companies in the next decade or two.

FedEx rose 1.0 per cenT after hiking its dividend to 40 cents per share from 25 cents.