Energy and metals stocks rose Monday with commodity prices, pushing indexes higher as well.
Dow Picks Up 46, Nasdaq Finishes Up 16
NEW YORK (AP) — Commodity prices recovered some of last week’s losses Monday, helping to lift the stocks of energy and materials companies. The broader market also rose despite new worries about Greece’s debt problems.
Oil prices once again moved above $100 a barrel and pushed energy stocks higher. Marathon Oil Corp. rose 5.3 percent. Baker Hughes Inc., which helps companies drill for oil and gas, gained 3.4 percent. Energy companies within the S&P 500 rose nearly 2 percent, the most among the 10 industries in the index.
The S&P 500 added 6.09 points, or 0.5 percent, to close at 1,346.29. The Dow Jones industrial average gained 45.94 points, or 0.5 percent, to 12,684.68. The Nasdaq composite index rose 15.69 points, or 0.6 percent, to 2,843.25.
The rise in commodity prices helped other industries as well. Producers of metals and other materials rose 1.5 percent, second best among the S&P 500 groups, thanks to a 5 percent increase in silver prices and a 3 percent increase in corn. Metals and other commodities suffered steep losses last week, when silver tumbled 27 percent and oil sank 15 percent because of fears of weaker global demand and higher margin requirements that were meant to lower the influence of speculators whose strategy of buying on margin is considered to be a reason why commodities have risen so steeply over the last year.
Financial stocks were the only industry group to decline. Citigroup Inc. fell 2.7 percent on its first day of trading after completing a one-for-ten reverse split that drastically increased its share price by lowering the number of available shares. It is now trading in the $40 range for the first time since 2007. Companies often turn to reverse splits to raise their share prices as a way to attract institutional investors who may be prohibited from buying into companies with share prices in the single digits.
Better sales pushed other companies higher. The nation’s largest food distributor, Sysco Corp., jumped 10.7 percent after reporting a 4 percent rise in income. Analysts had expected a drop. McDonald’s Corp. rose 0.8 percent after reporting that its global sales rose last month. The strongest growth came from its restaurants abroad, which stretch from Europe to the Middle East to Asia. Tyson Foods Inc. lost 6 percent after reporting that its earnings were flat from a year ago.
Dollar Thrifty Automotive Group Inc. rose 13.8 percent after Hertz Global Holdings Inc. raised its buyout offer for the car rental company to more than $2.2 billion. Rival Avis Budget Group Inc. is also trying to buy Dollar Thrifty.
Most companies in the S&P 500 have reported earnings for the first quarter, and the trends have been strong. Through Friday, nearly three out of four companies released earnings that beat analysts’ expectations.
Economic data, by contrast, has been mixed. Growth for the manufacturing industry slowed last month, and the economy grew at a lower-than-expected 1.8 percent in the first quarter.
European stock markets fell on worries that Greece will need more time or assistance from other EU countries to make payments on its debt, or worse, the country could partially default on the debt that it owes to bond investors. Standard & Poor’s downgraded Greece’s debt rating even further into junk status. The Euro Stoxx 50, an index of large companies in countries that use the euro, fell 1.7 percent.
The yield on the 10-year Treasury note remained close to its lowest point of the year, 3.13 percent. It fell that low on Friday after a German magazine claimed that Greece may drop the euro currency. Greece’s government strongly denied the claim. Worried investors have bought Treasurys, traditionally seen as a safe investment. When Treasury prices rise, their yields fall.
Two stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume came to 3 billion shares.