Stocks rise as oil makes another swift reversal - Los Angeles Times
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Stocks rise as oil makes another swift reversal

The floor of the New York Stock Exchange.
(Richard Drew / Associated Press)
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U.S. stocks jumped Tuesday as the price of oil made another abrupt reversal, this time rising almost 4% after falling sharply the day before.

Energy stocks climbed along with the price of oil, and Chevron and Exxon Mobil made major gains. Strong fourth-quarter results from beleaguered wireless provider Sprint gave telecom stocks a boost. Quarterly earnings also sent several stocks higher, including Post-it Notes maker 3M; Procter & Gamble, which makes Crest toothpaste; and luxury handbag maker Coach.

The Dow Jones industrial average jumped 282.01 points, or 1.8%, to 16,167.23. The Standard & Poor’s 500 index rose 26.55 points, or 1.4%, to 1,903.63. The Nasdaq composite index climbed 49.18 points, or 1.1%, to 4,567.67.

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Energy stocks gained ground as the price of U.S. crude rose $1.10, or 3.7%, to close at $31.45 a barrel in New York. It fell almost 6% Monday. Brent crude, a benchmark for international oils, rose $1.30, or 4.3%, to $31.80 a barrel in London. Despite the rebound, U.S. crude is down almost 18% this month.

Exxon Mobil went up $2.72, or 3.7%, $76.70, and Chevron rose $3.23, or 4%, to $84.12.

Quarterly earnings contributed to many of the biggest moves of the day. Procter & Gamble reported a larger profit in the fourth quarter as it raised prices and cut costs. Shares climbed $1.96, or 2.6%, to $78.81.

Coach reported a greater profit than analysts had expected, and its stock rose $2.98, or 9.8%, to $33.33. Even with that big gain, however, it’s down 10% over the last 12 months.

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3M, which makes industrial coatings and ceramics, reported a greater profit and more revenue than analysts expected. It rose $7.21, or 5.2%, to $144.78.

The Dow had its best day since early December. Many of the companies making the biggest gains, including Exxon, Chevron and 3M, are Dow components. The Nasdaq made smaller gains because tech stocks didn’t rise as much as the broader market.

Huntington Bancshares agreed to buy competitor FirstMerit Corp for $3.4 billion. The deal would create the largest bank in Ohio, and the companies would have about $100 billion in combined assets. FirstMerit rose $2.82, or 18.3%, to $18.19, and Huntington fell 75 cents, or 8.5%, to $8.50.

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Sprint, the fourth-largest wireless provider in the United States, posted a smaller loss in its third quarter and said its aggressive promotions attracted more users. The company raised its outlook for the year.

Sprint’s stock rose 47 cents, or 18.7%, to $2.99. The stock, which hit an all-time low last Wednesday, has been on a wild ride the last few days, jumping almost 15% on Friday and then falling 12% on Monday, when Sprint said it had cut about 2,500 jobs since last fall, or 8% of its staff.

Other telecom stocks also jumped Tuesday. Verizon Communications climbed $1.22, or 2.6%, to $48.25.

Although the market made broad gains and undid most of Monday’s losses, it’s still down substantially this year, and there are signs investors have big worries about the global economy.

The yield on the 10-year Treasury note slipped to 2% from 2.01%, and the yield on the two-year Treasury note slid to 0.84% from 0.86%. In the last week, the yields on those two bonds have gotten closer than they’ve been since June 2008, a sign that investors are concerned about economic growth.

“Fear is the biggest driver,” said Guy LeBas, chief fixed income strategist for Janney Capital. LeBas said investors are also anticipating weaker inflation and think the Federal Reserve will be more cautious about raising interest rates because the market has experienced so much turmoil this month.

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U.S. government bonds get more popular with investors when the economy looks dicey because the government is extremely likely to make good on its debt. Investors are willing to accept lower interest payments when they are concerned about safety.

When yields on longer-term bonds such as the 10-year bond fall toward the yield on short-term bonds, it signals that investor expectations for future growth have dimmed.

France’s CAC 40 rose 1.1%, and Germany’s DAX picked up 0.9%. Britain’s FTSE 100 gained 0.6%. However, Asian markets were hammered by Monday’s slide in oil prices, which can signal weak demand. The Shanghai Composite dived 6.4% to finish at 2,749.78, the lowest since December 2014. Japan’s Nikkei 225 dropped 2.4% to 16,708.90.

Gold rose $14.90, or 1.3%, to $1,120.20 an ounce, and silver gained 31 cents, or 2.2%, to $14.564 an ounce. Copper picked up 1.9 cents to $2.158 a pound.

The price of gold has risen 5.8% this year. Only 13 stocks in the S&P 500 have made a bigger gain.

In other energy trading, wholesale gasoline rose 1.7 cents to $1.047 a gallon, and heating oil gained 3.2 cents, or 3.5%, to 96.8 cents. Natural gas added 2.2 cents to reach $2.18 per 1,000 cubic feet.

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The euro edged up to $1.0853 from $1.0837, and the dollar inched down to 118.46 yen from 118.48 yen.

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