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U.S. stock indexes drift mostly higher; oil price rebounds

🕐 3 min read

U.S. stock indexes were on track for an uneven close in late-afternoon trading Tuesday after spending much of the day drifting mostly higher. Energy, mining and financial companies were among the big gainers, while the technology sector lagged the most, dragged down by Netflix and IBM.

KEEPING SCORE: The Dow Jones industrial average rose 47 points, or 0.3 percent, to 18,051 as of 3:25 p.m. Eastern time. The Standard & Poor’s 500 index gained six points, or 0.3 percent, to 2,100. The Nasdaq composite index fell 18 points, or 0.4 percent, to 4,942.

EARNINGS ON DECK: Investors are focused on what Corporate America has to say the next few weeks as companies report their latest quarterly results. Expectations for earnings are low this quarter, with corporate profits for companies in the S&P 500 projected to be down 8.1 percent, according to S&P Global Market Intelligence. Even excluding the beaten-down energy sector, earnings growth for the S&P 500 companies is expected to be down 3.4 percent.

All of the earnings growth this year is expected to come in the second half of 2016, noted Erin Gibbs, equity chief investment officer at S&P Global Market Intelligence.

“This year it’s also all about the guidance,” she said. “It’s very much about how companies expect to do for the next three quarters over the year.”

BIG GAINER: Rig operator Transocean jumped 10.1 percent, the biggest gain among companies in the S&P 500. The stock added 98 cents to $10.74.

MINE THIS: Several mining companies were up sharply. Freeport-McMoRan gained 96 cents, or 8.8 percent, to $11.99, while Newmont Mining rose $1.44, or 4.9 percent, to $30.90.

ENERGY PLAY: Investors bid up oil and natural gas drilling and production companies. Oneok climbed $2.16, or 6.7 percent, to $34.32, while Diamond Offshore Drilling rose $1.42, or 6.4 percent, to $23.77. Noble Energy gained $1.77, or 5.1 percent, to $34.35.

HEALTHIER OUTLOOK: UnitedHealth Group added 1.9 percent after health insurance company raised its guidance for the year and reported strong results for the first quarter. The company also said it would cut back on participating in Affordable Care Act health care exchanges in a bid to stem losses related to the program. The stock gained $2.44 to $130.25.

STRONG QUARTER: Kansas City Southern gained 4.4 percent after the railroad operator posted larger-than-expected quarterly earnings. The stock rose $4.05 to $95.52.

TUNING OUT: Netflix slumped 12.2 percent a day after the streaming video company’s latest subscriber forecast disappointed investors. Netflix’s first-quarter revenue also fell short of Wall Street’s expectations. The stock lost $13.25 to $95.15.

CTRL-ALT-DEL: IBM slid 5.7 percent after the company delivered improved first-quarter earnings thanks to a big tax refund, but also lower revenue amid weaker software sales. The stock shed $8.72 to $143.81.

FORECAST LETDOWN: Illumina sank 23.2 percent after the genetic testing tools maker predicted that sales in the first quarter will be far lower than analysts expected. Illumina shares were down $41.3 at $136.80.

OVERSEAS: Upbeat economic data and a rebound in oil prices lifted European markets. Germany’s DAX was up 2.3 percent, while France’s CAC 40 was up 1.3 percent. Britain’s FTSE 100 was up 0.8 percent. Earlier in Asia, Japan’s Nikkei rallied 3.7 percent a sharp loss on Monday. South Korea’s Kospi rose 0.1 percent, while Hong Kong’s Hang Seng index gained 1.3 percent.

ENERGY: Benchmark U.S. crude rose $1.30, or 3.3 percent, to close at $41.08 a barrel in New York. Brent crude, the international benchmark, gained $1.12, or 2.6 percent, to close at $44.03 a barrel in London.

In other energy trading, wholesale gasoline rose about 4 cents, or 3 percent, to close at $1.48 a gallon. Heating oil added 3 cents, or 2.2 percent, to close at $1.26 a gallon. Natural gas jumped 15 cents, or 7.6 percent, to close at $2.088 per 1,000 cubic feet.

METALS: Precious and industrial metals futures ended sharply higher. Gold rose $19.30, or 1.6 percent, to $1,254.30 an ounce, silver gained 72 cents, or 4.4 percent, to $16.97 an ounce and copper rose 6 cents, or 2.7 percent, to $2.22 a pound.

BONDS AND CURRENCIES: Bond prices fell. The yield on the 10-year Treasury note rose to 1.78 percent from 1.77 percent late Monday. In currency markets, the yen resumed its slide with the dollar strengthening to 109.13 yen from 108.82 yen. The euro rose to $1.1377 from $1.1314.

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