Oil prices and energy companies jump as U.S. stocks advance

Marley Jay, The Associated Press</span>
Published Friday, June 22, 2018 12:34AM EDT
Last Updated Friday, June 22, 2018 10:24AM EDT

NEW YORK -- U.S. stocks are rising Friday morning as energy companies climb along with the price of oil. Oil producers in OPEC are discussing an increase in production, a step investors have expected for the last few weeks. Industrial and basic materials companies are rising as well while technology companies are mostly lower. The European Union is following through on its promise to put import taxes on $3.4 billion in U.S. goods including bourbon, peanut butter and orange juice in response to U.S. tariffs on steel and aluminum.

KEEPING SCORE: The S&P 500 index added 11 points, or 0.4 per cent, to 2,760 as of 9:50 a.m. Eastern time. The Dow Jones Industrial Average, which has fallen for eight days in a row, gained 143 points, or 0.6 per cent, to 24,604. The Nasdaq composite slid 5 points, or 0.1 per cent, to 7,707. The Russell 2000 index of smaller-company stocks inched up 2 points, or 0.1 per cent, to 1,690.

OIL: Oil prices and energy companies rallied as the countries of OPEC, along with Russia, discussed increasing their production by about 1 million barrels per day. Increased production means lower prices, but investors expected that outcome after several weeks of reports that those countries would agree to produce more oil. The move undoes part of a cut in production they instituted at the beginning of 2017.

Oil prices hit a three-year high of about $72 a barrel in May and have declined since then as reports suggested an increase in production was coming.

U.S. crude climbed 2.7 per cent to $67.31 a barrel in New York. Brent crude, the standard for international oil prices, rose 2.2 per cent to $74.66 a barrel in London.

Chevron jumped 3.1 per cent to $126.41 and Exxon Mobil picked up 2.1 per cent to $81.28.

TARIFFS: The European Union is enforcing tariffs on $3.4 billion in U.S. products as of Friday in retaliation for duties the Trump administration has put on European steel and aluminum. The goods targeted include typical American products like bourbon, peanut butter and orange juice, in a way that seems designed to create political pressure on U.S. President Donald Trump and senior U.S. politicians.

EU authorities had said the move was coming in response to the U.S. import duties. In two weeks, the U.S. is to start taxing $34 billion in Chinese goods, with the possibility of adding another $16 billion later. Beijing has vowed to immediately retaliate with its own tariffs on U.S. soybeans and other farm products.

EARNINGS: Used car dealership CarMax advanced 9.8 per cent to $78.02 after its first-quarter results surpassed analysts' expectations.

Open source software maker Red Hat dropped 12.7 per cent to $145.29 after it cut its sales forecasts due to the strengthening dollar. Other technology companies also declined. The industry has been leading the market for more than a year, but it makes more of its sales outside the U.S. than any other major S&P 500 sector. Microsoft fell 1.3 per cent to $99.88 and chipmaker Nvidia lost 1.7 per cent to $252.66.

OVERSEAS: The CAC 40 in France climbed 1 per cent and Britain's FTSE 100 gained 1.3 per cent. In Germany the DAX rose 0.4 per cent.

Some Asian markets gained following heavy losses on previous days but finished lower than a week ago. Hong Kong's Hang Seng index edged up 0.2 per cent while Japan's Nikkei 225 lost 0.8 per cent. The South Korean Kospi advanced 0.8 per cent.

BONDS: Bond prices dipped. The yield on the 10-year Treasury note rose to 2.92 per cent from 2.90 per cent.

CURRENCIES: The dollar rose to 110.06 yen from 109.90 yen. The euro advanced to $1.1644 from $1.1617.

Let's block ads! (Why?)