NEW YORK — The Russian ruble recouped some of its losses and crude oil steadied Tuesday afternoon, boosting the U.S. stock market.
Major U.S. energy stocks surged, leading a rebound in the market. Chevron jumped 3 percent, the biggest gain of the 30 stocks in the Dow Jones industrial average.
The ruble strengthened against the dollar after Russia’s central bank hiked its key interest rate in an effort to shore up the currency. Russia’s currency, under pressure from falling oil prices and Western sanctions over Moscow’s conflict with Ukraine, had fallen as much as 20 percent before recovering.
KEEPING SCORE: The Standard & Poor’s 500 index was up 23 points, or 1.2 percent, to 2,012 as of 12 p.m. Eastern time. Energy companies gained 2.8 percent, leading all 10 sectors of the index higher.
The Dow rose 204 points, or 1.2 percent, to 17,302, while the Nasdaq composite rose 10 points, or 0.7 percent, to 4,616.
OIL: Benchmark U.S. crude rose two cents to $55.93 a barrel in New York. Oil has fallen by nearly half since June as demand wanes and supply surges. The recent drop to five-year lows puts more money in the pockets of American consumers, but it will also hurt energy companies
CRUDE IMPACT: The volatility in financial markets is likely to last until oil prices find a floor, said Marc Zabicki, senior market strategist at Ameriprise Financial.
“Lower oil prices certainly are a net positive for U.S. consumer spending,” he said. “But there’s a contagion risk out there that investors have an eye on. Namely, what does it do to shale gas players, and what does it mean to the banks that lend to them?”
EUROPE. Major markets in Europe turned higher. France’s CAC 40 gained 2.1 percent, while Germany’s DAX picked up 2.4 percent. Britain’s FTSE 100 climbed 2.3 percent.
RUBLE ROUT: Russia’s central bank hiked interest rates to 17 percent from 10.5 percent late Monday. The ruble is down more than 60 percent from where it was in January.
ANALYST’S TAKE: “No one expected the ruble to hit 60 this year against the dollar, let alone 70 or 80 even,” wrote Timothy Ash at Standard Bank PLC. “And no one is positioned for this. This will impart huge short-term damage to Russia — there is now a huge credibility gap for Russian policymakers in the eyes of the market.”
A DEAL: Talisman Energy soared 48 percent following news that Repsol, a Spanish oil and gas producer, plans to buy the Canadian company for $8.3 billion. The merger would create one of the world’s largest privately owned oil and gas companies, Repsol said. Canadian courts and shareholders still have to sign off on the deal. Talisman’s stock gained $2.44 to $7.57.
ROUGH PATCH: December, usually one of the market’s best months, hasn’t been living up to its reputation. Since reaching a record high on Dec. 5, the S&P 500 has fallen into a slump, losing ground on five of the past six trading days. Energy companies have been hit the hardest, a result of the ongoing slump in crude. The S&P 500 has lost 3 percent so far this month.
CHINA FACTORIES: In other trading on Tuesday, shares in Shanghai made gains after a HSBC report on manufacturing showed a contraction for the first time in seven months. Although the numbers underscored the persistent weakness in China, the world’s second-biggest economy, they also raised hopes for more stimulus from China’s central bank following a surprise interest rate cut last month.
BONDS: Prices for U.S. government bonds rose. The yield on the 10-year Treasury note fell to 2.08 percent from 2.12 percent late Monday.