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US stocks move higher, led by gains in energy companies

🕐 3 min read

Encouraging economic data on housing and consumer spending helped drive U.S. stocks sharply higher in midday trading Monday. Energy stocks were among the biggest gainers, bucking a slide in the price of crude oil. Expectations that any increase in the Federal Reserve’s key interest rate this year will be gradual also helped lift the market.

KEEPING SCORE: The Dow Jones industrial average climbed 263 points, or 1.5 percent, to 17,976 as of 12:07 p.m. Eastern. The Standard & Poor’s 500 index rose 21 points, or 1.1 percent, to 2,082. The Nasdaq composite gained 39 points, or 0.8 percent, to 4,931.

CONSUMER REBOUND: The Commerce Department said that consumer spending edged up 0.1 percent in February following two straight monthly declines. The report also showed consumers’ incomes rose a solid 0.4 percent, a development that could mean higher spending in coming months.

HOUSING BAROMETER: A gauge of future home sales surged to its highest level since June 2013. The National Association of Realtors reported that its seasonally adjusted index of pending home sales rose 3.1 percent in February. The report suggests that the spring buying season could open strongly after sluggish sales for much of the winter. KB Home led a broad rally among homebuilders. The stock rose 46 cents, or 3 percent, to $15.74.

FED FACTOR: Also shoring up markets were remarks on Friday by Federal Reserve Chair Janet Yellen. In her speech, Yellen noted that continued improvement in the U.S. economy means an increase in the Fed’s key interest rate could come later this year, but would likely be gradual.

THE QUOTE: “She continues to put forth the message that there will be a rate hike this year, but it will be quite measured and quite gradual going forward,” said Erik Davidson, chief investment officer for Wells Fargo Private Bank. “The market takes some confidence in that.”

SECTOR VIEW: The 10 sectors in the S&P 500 moved higher, with energy stocks notching the biggest gain. The sector was up 1.7 percent. Analog Devices led all stocks in the S&P 500, climbing $5.54, or 9.4 percent, to $64.38.

PRESCRIBED BUYOUT: UnitedHealth Group jumped 2.1 percent after the nation’s largest health insurer said it would buy pharmacy benefits manager Catamaran Corp. Shares in UnitedHealth added $2.53 to $120.54. Catamaran vaulted 23.9 percent, adding $11.57 to $59.89.

KITCHEN REMODEL: Fortune Brands Home & Security has agreed to buy kitchen and bathroom cabinet maker Norcraft Companies for about $600 million in cash. Shares in Fortune Brands rose $2.41, or 5.5 percent, to $46.71. Norcraft gained $2.62, or 11.4 percent, to $25.52.

BIGGER PHARMA: Shares in Auspex Pharmaceuticals soared 41.8 percent after it agreed to be acquired by Teva Pharmaceuticals Industries for about $3.2 billion in cash. Auspex gained $29.62 to $100.53.

EUROZONE UPTICK: A survey from the European Commission showed economic sentiment across the region at its highest level since July 2011. Its main economic sentiment indicator rose to 103.9 in March from 102.3 the month before. That’s consistent with annual economic growth of around 1.5 percent.

OVERSEAS MARKETS: In Europe, Germany’s DAX was up 1.7 percent, while the CAC-40 in France rose 1 percent. The FTSE 100 index of leading British shares rose 0.3 percent. In Asia, Chinese stocks soared on hopes of more economic stimulus. The Shanghai Composite Index rose 2.6 percent, while Hong Kong’s Hang Seng jumped 1.5 percent. Japan’s benchmark Nikkei 225 closed up 0.7 percent.

ENERGY: Benchmark U.S. crude lost 58 cents to $48.29 a barrel on the New York Mercantile Exchange.

BONDS: U.S. government bond prices rose. The yield on the 10-year Treasury note edged down to 1.96 percent from 1.97 percent late Friday.

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