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Stocks climb as report of OPEC deal lifts oil prices

Pedestrians walk past an American flag displayed outside

Pedestrians walk past an American flag displayed outside of the New York Stock Exchange on Wall Street on Monday, Sept. 12, 2016. Photo Credit: Bloomberg News / Michael Nagle

U.S. stock indexes are higher Wednesday afternoon as energy companies climb following reports that OPEC nations agreed to a deal that would limit oil production in an effort to bolster prices. Phone and health care companies are taking losses. Stocks have switched between gains and losses throughout the day.

KEEPING SCORE: The Dow Jones industrial average rose 94 points, or 0.5 percent, to 18,321 as of 2:48 p.m. The Dow was aided by a big gain for heavy machinery maker Caterpillar, which climbed $2.88, or 3.5 percent, to $85.76. The Standard & Poor’s 500 index added 8 points, or 0.4 percent, to 2,168. The Nasdaq composite edged up 6 points, or 0.1 percent, to 5,311.

Stocks have stayed in a narrow range Wednesday. That followed five days of substantial moves in a row dating back to last week’s Federal Reserve meeting.

OIL: Energy stocks made their biggest gains since February after Reuters reported that the OPEC countries agreed to limit oil production. Investors have long hoped for such a deal, as it would help address a gigantic supply glut that knocked the price of oil from around $100 a barrel in mid-2014 to $26 in February.

Benchmark U.S. crude jumped $2.38, or 5.3 percent, to $47.05 a barrel in New York. Brent crude, the international standard, was up $2.72, or 5.9 percent, to $48.69 a barrel in London.

Exxon Mobil picked up $3.34, or 4 percent, to $86.58 and Chevron rose $2.85, or 2.9 percent, to $101.83.

Oil prices jumped 3 percent Monday and then fell 3 percent Tuesday as hopes for a production deal rose and fell, and oil repeatedly changed course Wednesday as well.

HANGING UP: Phone companies took suffered some of the largest declines. AT&T fell 69 cents, or 1.7 percent, to $40.78 after a UBS analyst downgraded the company to “Neutral” from “Buy.” Analyst John Hodulik said profits will get squeezed as the companies offer trade-in deals to try to win customers. He cut his profit forecast for Verizon, which lost 51 cents, or 1 percent, $51.99.

AT&T has climbed 18 percent this year and Verizon has risen 12 percent as investors sought out stocks that pay big dividends while bond yields remain low.

JUST DIDN’T DO IT: Nike’s profit and sales were stronger than analysts expected, but the athletic apparel maker’s stock slipped $2.34, or 4.2 percent, to $53.01 as investors worried about challenges including slower orders in North America. Credit Suisse analyst Christian Buss said orders in that market have been slowing down and are now at their slowest pace in five years as competition grows. Nike is down 14 percent this year, more than any other stock on the Dow Jones industrial average.

Nike rival Under Armour picked up 33 cents to $39.52.

BEERS ALL AROUND: Stockholders in SABMiller approved its combination with AB InBev. That vote was one of the last hurdles in the giant beer merger, which has already been cleared by regulators. Some investors saw their payout shrink after Britain voted to leave the European Union. AB InBev stock rose $1.22 to $133.10. As part of the deal, Molson Coors will gain full ownership of its joint venture with SABMiller, MillerCoors. Its stock climbed $2.15, or 2 percent, to $109.68.

SLEEPLESS NIGHTS: Tempur Sealy International tumbled after the company said third-quarter sales aren’t meeting its expectations. It cut its guidance and said it expects revenue to fall as much as 3 percent this year. That suggests sales of no more than $3.12 billion, while FactSet says analysts expected $3.23 billion on average. Tempur Sealy stock dropped $18.16, or 24.4 percent, to $56.29.

SNAPPY DRESSERS: Uniform rental company Cintas reported a bigger profit than analysts expected in its fiscal first quarter and it raised its projections for the year. Cintas stock added $2.85, or 2.5 percent, to $116.28.

DEUTSCHE BANK RELIEF: Deutsche Bank traded higher after the German bank said it will sell a life insurance subsidiary and emphasized it is not seeking government aid. The company is selling its Abby Life unit to Phoenix Life Holdings for about $1.2 billion. Investors have been worrying about Deutsche Bank’s ability to pay a $14 billion claim from the U.S. government. Its U.S.-listed stock, which is down by half this year, rose 29 cents, or 2.5 percent, to $12.22 Wednesday.

OTHER ENERGY TRADING: Wholesale gasoline jumped 8 cents, or 6 percent, to $1.48 a gallon. Heating oil gained 8 cents, or 5.8 percent, to $1.49 a gallon. Natural gas fell 4 cents to $2.95 per 1,000 cubic feet.

BONDS, CURRENCIES: Bond prices were little changed. The yield on the 10-year Treasury note remained at 1.56 percent. The dollar rose to 100.59 yen from 100.27 yen and the euro inched down to $1.1206 from $1.1221.

METALS: Gold fell $6.70 to $1,323.70 an ounce. Silver shed 4 cents to $19.12 an ounce. Copper added 2 cents to $2.19 per pound.

OVERSEAS: The CAC-40 in France added 0.8 percent while Germany’s DAX rose 0.7 percent. In Britain, the FTSE 100 gained 0.6 percent. Tokyo’s Nikkei 225 index fell 1.3 percent and Hong Kong’s Hang Seng was unchanged. Seoul’s Kospi added 0.9 percent.

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