US: Oil strength lifts Dow; tech shares lag

[NEW YORK] A big surge in oil prices pushed petroleum stocks higher on Monday, while the Nasdaq dropped on weakness in Facebook and some other major tech names.

The Dow Jones Industrial Average rose 67.18 points (0.40 per cent) to 17,073.95.

The broad-based S&P 500 added 1.77 (0.09 per cent) at 2,001.76, while the tech-rich Nasdaq Composite Index dipped 8.77 (0.19 per cent) to 4,708.25.

Dow members ExxonMobil and Chevron jumped 2.6 per cent and 3.1 per cent, respectively, following a 5.5 per cent jump in oil prices, as the petroleum market continued to strengthen on hopes of a deal by producers to limit output.

Other commodity-linked companies also gained, including Dow member Caterpillar, up 2.7 per cent, United States Steel, up 4.6 per cent, and aluminum producer Alcoa, up 4.9 per cent.

But Facebook dropped 2.5 per cent, Netflix 6.0 per cent and Google parent Alphabet and Amazon both 2.2 per cent, as investors rotated into commodity investments from stocks that have outperformed, said Michael James, managing director of equity trading at Wedbush Securities.

"We continue to be in a market of rotation," Mr James said. "Things that have performed well that are overowned are being sold, or trimmed."

Apple lost 1.1 per cent after the US Supreme Court upheld lower-court rulings that it was part of a price-fixing conspiracy for electronic books. The court's decision clears the way for a US$450 million settlement to be paid by Apple.

Dow member DuPont rose 2.4 per cent following a report that German chemical company BASF is considering a counterbid for the US company, potentially overtaking DuPont's planned merger with Dow Chemical. Dow lost 1.1 per cent.

Furniture and home-furnishings retailer Pier 1 Imports jumped 29.2 per cent after announcing that it expects fourth-quarter comparable sells dipped 0.7 per cent, better than the prior projection of a decline of between two and four per cent.

Valeant Pharmaceuticals rose 7.1 per cent after announcing it will release fourth-quarter earnings on March 15. Valeant previously withdrew its financial forecast amid an internal review of its accounting practices and said it was under investigation by US regulators.

AFP