Energy companies lead an advance in US stocks
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NEW YORK — Energy and health-care companies led major stock indexes higher on Tuesday, even as crude oil resumed its slide. General Motors rose after reporting stronger sales, and Biogen, a biotech company, soared following news that its drug for Alzheimer’s disease showed promise.
Reports that fewer people turned out to shop over the Thanksgiving weekend helped knock the market down on Monday. But those concerns were likely overblown, as other evidence suggests that people simply wanted to avoid the crowds at Black Friday sales, said Brad McMillan, the chief investment officer at Commonwealth Financial. IBM Digital Analytics, for instance, said that sales on Cyber Monday jumped 8 percent.
“I think what you’re seeing is a little reality settling in,” McMillan said. “Look at Cyber Monday numbers. You see that and say hmm, maybe it’s not going to be so bad after all.”
The Standard & Poor’s 500 index rose 13.11 points, or 0.6 percent, to 2,066.55.
The Dow Jones industrial average gained 102.75 points, or 0.6 percent, to 17,879.55, while the Nasdaq composite rose 28.46 points, or 0.6 percent, to 4,755.81. Oil and gas companies led nine of the 10 industries in the S&P 500 higher.
The one economic report out Tuesday gave investors some encouragement. Newly built houses and schools lifted U.S. construction spending in October to the highest level since May, the Commerce Department said. Overall construction spending climbed 1.1 percent, higher than economists’ forecasts.
General Motors posted solid sales gains in the U.S. last month, helped by discounts and falling gas prices. GM’s sales climbed 6 percent to nearly 226,000 in November. The carmaker’s stock gained 32 cents, or 1 percent, to $33.26.
Among other companies making big moves, Avanir Pharmaceuticals soared on news that Otsuka Pharmaceuticals of Japan plans to buy the company for $3.5 billion. Under the terms of the deal, Otsuka would pay Avanir investors $17 per share in cash. Avanir’s stock jumped $1.92, or 13 percent, to $16.92.
Crude oil prices resumed their long slide, falling $2.12 to settle at $66.88 a barrel in New York trading. The slump has rippled throughout financial markets in recent weeks, putting stress on oil-exporting countries such as Russia. On Tuesday, Russia’s government forecast that the country’s economy will shrink next year. That helped send Russia’s currency down 5 percent against the dollar and drive its RTS stock index down 3 percent.
“The economic conditions Russia is facing right now are aggressively against its economy,” said Jameel Ahmad, Chief Market Analyst for FXTM.
Elsewhere in Europe, Germany’s DAX slipped 0.3 percent, while France’s CAC 40 inched up 0.3 percent. In the U.K., the FTSE 100 index of leading British shares gained 1.3 percent.
In Asia, Japan’s Nikkei rose 0.4 percent. In China, the Shanghai Composite Index climbed 3 percent, and Hong Kong’s Hang Seng added 1.2 percent.
Traders will have a batch of economic news to digest over the rest of the week. On Thursday, the European Central Bank meets to discuss whether the region’s flagging economy needs more support. On Friday, the U.S. Labor Department releases its look at employment in November, a report that often sends markets swinging.
In other trading on Tuesday, government bond prices fell, pushing the yield on the 10-year Treasury note up to 2.29 percent.
Prices for precious metals sank. Gold dropped $18.70 to settle at $1,199.40 an ounce, while silver slid 24 cents to $16.46 an ounce. Copper dipped a penny to $2.89 a pound.