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US: Stocks rise, helped by oil surge

Tuesday, February 23, 2016 - 06:38

37444650 - 12_02_2016 - US-STOCKS-DIVE-DEEPLY,-DOW-JONES-INDUSTRIALS-AVERAGE-LOSES-OVER-.jpg

[NEW YORK] Wall Street stocks advanced nearly 1.5 per cent on Monday, joining a global rally as rising oil prices helped spark especially large increases in petroleum-linked companies and technology shares.

The Dow Jones Industrial Average gained 228.67 points (1.40 per cent) at 16,620.66.

The broad-based S&P 500 jumped 27.72 (1.45 per cent) to 1,945.50, while the tech-rich Nasdaq Composite Index climbed 66.18 (1.47 per cent) to 4,570.61.

US oil prices rose more than six per cent, helping to lift shares of Halliburton and ConocoPhillips by almost five per cent and Dow member Chevron by 2.7 per cent.

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Other commodity-linked stocks also surged, including gold and copper producer Freeport-McMoRan, up 14.6 per cent, aluminum producer Alcoa, up 13.2 per cent, and United States Steel, up 4.7 per cent.

Technology stocks with especially big gains included Amazon, up 4.6 per cent, and Tesla Motors, up 6.7 per cent.

"Oil is driving the market both up and down," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.

"We saw a nice increase in oil prices today, a really substantial increase, and that moved not only energy stocks, but the entire market higher."

Monday's gains followed a strong day in global equities and helped return the S&P 500 into positive territory for February after a dismal first six weeks of the year.

But Mace Blicksilver, director of Marblehead Asset Management, said he was "cautious" about the prospect for further gains.

"I just don't think everything that was a concern two weeks ago has gone away," he said.

Key worries include doubts about the ability of oil prices to rise further and the likelihood that low interest rates will pressure bank earnings.

United Technologies rose 4.7 per cent following reports it was approached by Honeywell and offered a premium to be acquired. Both companies declined comment. Honeywell fell 2.0 per cent.

VF Corp, which owns the Nautica and Wrangler clothing brands, rose 3.4 per cent after reporting that fourth-quarter net income leaped 156 per cent to US$312.2 million. It forecast that 2016 revenue would rise at a mid single-digit rate.

Foodservices distributor Sysco sinks 4.9 per cent on news it will acquire European competitor Brakes Group for about US$3.1 billion.

AFP

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