Oil Prices And Energy Companies Jump As US Stocks Rise
This Jan. 4, 2018, file photo shows the interior of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EDT on Friday, June 22.
AP Photo/Mark Lennihan
NEW YORK (AP) — U.S. stocks are rising Friday morning as energy companies climb along with the price of oil. Oil producers in OPEC agreed to produce more oil, a step investors have expected for the last few weeks. The European Union is following through on its promise to put import taxes on $3.4 billion in U.S. goods including bourbon, peanut butter and orange juice in response to U.S. tariffs on steel and aluminum. President Donald Trump threatened to put a 20 percent tax on cars imported from Europe.
KEEPING SCORE: The S&P 500 index added 7 points, or 0.3 percent, to 2,757 as of 11:25 a.m. Eastern time. The Dow Jones Industrial Average, which has fallen for eight days in a row, gained 118 points, or 0.5 percent, to 24,579. The Nasdaq composite slid 21 points, or 0.3 percent, to 7,691. The Russell 2000 index of smaller-company stocks inched up 1 point, or 0.1 percent, to 1,690.
OIL: Oil prices and energy companies rallied as the countries of OPEC, along with Russia, agreed to boost production by almost 1 million barrels per day. Increased production means lower prices, but investors expected that outcome after several weeks of reports that those countries would agree to produce more oil. The move undoes part of a cut in production they instituted at the beginning of 2017.
Oil prices hit a three-year high of about $72 a barrel in May and have declined since then as reports suggested an increase in production was coming. However it's not clear if some members will be able to ramp up production.
U.S. crude climbed 3.7 percent to $67.96 a barrel in New York. Brent crude, the standard for international oil prices, rose 2.4 percent to $74.78 a barrel in London.
Chevron jumped 2.3 percent to $125.45 and Exxon Mobil picked up 2.5 percent to $81.65. Marathon Oil surged 8.3 percent to $21.58.
TARIFFS: The European Union is enforcing tariffs on $3.4 billion in U.S. products as of Friday in retaliation for duties the Trump administration has put on European steel and aluminum. The taxes are on American products including bourbon, peanut butter and orange juice, and the choices appear designed to create political pressure on Trump and senior U.S. politicians.
EU authorities had said the move was coming in response to the U.S. import duties. On Twitter, Trump threatened to impose a 20 percent tax on cars imported from the EU if barriers to trade are not removed soon. He had previously ordered the U.S. Trade Representative to look into possible tariffs or quotas on imported cars and car parts.
In Germany, shares of BMW lost 1.6 percent and Daimler sank 0.6 percent. Daimler fell more than 4 percent Thursday after it said Chinese tariffs on U.S. cars would contribute to a decline in its earnings this year.
EARNINGS: Used car dealership CarMax advanced 13.1 percent to $80.33 after its first-quarter results surpassed analysts' expectations.
Open source software maker Red Hat dropped 10.8 percent to $147.51 after it cut its sales forecasts due to the strengthening dollar. Other technology companies also declined. The industry has been leading the market for more than a year, but it makes more of its sales outside the U.S. than any other major S&P 500 sector. Microsoft fell 1.2 percent to $99.96 and chipmaker Nvidia lost 2.4 percent to $251.
OVERSEAS: The CAC 40 in France climbed 1.3 percent and Britain's FTSE 100 gained 1.6 percent. In Germany the DAX rose 0.2 percent.
Some Asian markets gained following heavy losses on previous days but finished lower than a week ago. Hong Kong's Hang Seng index edged up 0.2 percent while Japan's Nikkei 225 lost 0.8 percent. The South Korean Kospi advanced 0.8 percent.
BONDS: Bond prices recovered after an early dip. The yield on the 10-year Treasury note remained at 2.90 percent.
CURRENCIES: The dollar rose to 109.93 yen from 109.90 yen. The euro advanced to $1.1631 from $1.1617.
- by Marley Jay, AP reporter