Stocks Head Higher, Bouncing Back From Day Before
NEW YORK (AP) — Energy companies led major stock indexes higher 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.
KEEPING SCORE: The Standard & Poor's 500 index was up nine points, or 0.4 percent, to 2,063 as of 12:06 p.m. Eastern time. The Dow Jones industrial average rose 62 points, or 0.4 percent, to 17,839, while the Nasdaq composite rose 23 points, or 0.5 percent, to 4,750. Energy stocks in the S&P 500 rose 1.4 percent, the most of the 10 sectors in the index. Only telecommunications stocks fell, giving up 1 percent.
WHAT'S HAPPENING: "I think what you're seeing is a little reality settling in," said Brad McMillan, the chief investment officer at Commonwealth Financial. Reports that the holiday shopping season was off to a weak start helped knock the market down on Monday. But those concerns were likely overblown, McMillan said. IBM Digital Analytics said sales for Cyber Monday jumped 8 percent.
ON THE ROAD: General Motors posted solid sales gains in the U.S. last month, helped by discounts and falling gas prices. GM sales climbed 6 percent to nearly 226,000 in November. The carmaker's stock gained 35 cents, or 1 percent, to $33.29 in early trading.
JOIN THE CREW: Royal Caribbean Cruises surged $3.91, or 5 percent, to $76.20. S&P Dow Jones Indices said late Monday that the operator of cruise ships will replace Bemis, a maker of packaging products and toilet seats, in the S&P 500 index following the end of trading on Thursday. When a company joins the S&P 500, it tends to attract more money from investors who want to stick close to the benchmark.
DEAL: 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. Both drugmaker's boards have already signed off on the deal. Avanir's stock jumped $1.95, or 13 percent, to $16.96.
EUROPE: Germany's DAX slipped 0.3 percent, while France's CAC 40 rose 0.3 percent. In the U.K., the FTSE 100 index of leading British shares gained 1.3 percent.
CRUDE: The price of crude oil slid $1.28 to $67.72 a barrel in New York trading. A steep slump in oil prices has rippled throughout financial markets in recent weeks. The drop has put stress on oil-exporting countries such as Russia, which is already under strain from Western sanctions over its backing of rebels in eastern Ukraine. Russia's ruble fell another 5.6 percent Tuesday, while the country's RTS stock index dropped 3.4 percent.
ANALYST TAKE: "The economic conditions Russia is facing right now are aggressively against its economy," said Jameel Ahmad, Chief Market Analyst for FXTM.
GLOBAL FEARS: There were no major economic reports out Tuesday, but 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 employment report for November.
ASIA'S DAY: 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.
CURRENCIES: The dollar rose against the yen after Moody's cut the Japanese government's credit rating. The dollar was up almost one yen at 119.11 yen. The euro fell to $1.2392 from $1.2475.
– by AP Reporter Matthew Craft