U.S. Stocks Rise On Higher Oil Prices; Energy Sector Rallies

NEW YORK (AP) — U.S. stocks rose broadly in midday trading on Monday following a jump in oil prices. Eight of the 10 industry sectors in the Standard and Poor's 500 index climbed. European markets were stable after France endorsed Greece's efforts to ease the terms of its financial rescue program.

KEEPING SCORE: The Dow Jones industrial average was up 31 points, or 0.2 percent, at 17,195 as of 12:25 p.m. Eastern time. The S&P 500 rose seven points, or 0.3 percent, to 2,002. The Nasdaq composite rose four points, or 0.1 percent, to 4,639.

OIL RISES: The price of crude oil rose 94 cents to $49.18 a barrel on signs that American oil production is slowing. Crude had surged on Friday, too. U.S. companies are under pressure to curtail drilling as prices fall to a level that makes some production unprofitable. Prices have fallen nearly 60 percent since June as global supplies grew faster than demand.

EXXON BEATS: Exxon Mobil rose 95 cents, or 1.1 percent, to $88.42 after reporting fourth-quarter earnings that were lower but still beat analysts' forecasts. The sharp drop in oil prices helped push earnings per share down 21 percent. Earnings would have dropped more if not for lower taxes, a favorable ruling in a dispute with Venezuela and strength in the company's chemical business. The energy giant is the second-largest company in the S&P 500 index after Apple.

ENERGY BOOST: Energy companies rose 1.7 percent, the biggest gain among the 10 sectors in the S&P 500.

FACTORY FUNK: U.S. manufacturing expanded last month at the slowest pace in a year as orders, production and hiring all declined. The Institute for Supply Management, a trade group of purchasing managers, said its manufacturing index fell to 53.5 in January from 55.1 in December. It was the third straight drop. Any reading above 50 signals expansion.

         Manufacturers are facing weak demand for their exports as overseas economies falter and the dollar increases in value, making U.S. goods more expensive. The sharp drop in oil prices has hurt, too. U.S. oil and gas drillers are ordering less drilling equipment and machinery.

DROP IN SHOPPING: U.S. consumer spending edged lower in December as vehicle sales slowed and more Americans chose to save rather than spend. The Commerce Department said spending fell 0.3 percent last month after rising 0.5 percent in November.

THE QUOTE: "The data was on the disappointing side, but you were hit with some decent supporting levels in crude," said Bill Strazzullo, chief market strategist at Bell Curve Trading. "You got some bounce off of that."

EARNINGS SO FAR: With about half the companies in the S&P 500 index already out with their results, earnings for companies in the index are expected to have risen 2.2 percent in the fourth quarter, according to FactSet, a financial data provider. That is one of the smallest gains since the economic recovery began nearly six years ago.

         Several big companies are reporting this week, including United Parcel Service and Disney on Tuesday and General Motors on Wednesday.

EUROPE: Germany's DAX rose 1.3 percent, France's CAC-40 and Britain's FTSE 100 each rose 0.5 percent.

CHINESE MANUFACTURING: Two reports suggested manufacturing weakened in the world's second-largest economy in January. The China Federation of Logistics and Purchasing said its purchasing managers' index fell to a 28-month low. A separate index by HSBC edged up but still indicated manufacturing was contracting.

         Both reports blamed weak demand in China and abroad. Analysts said they expect Beijing to inject more credit into the country's economy or launch other stimulus measures.

 

ASIA'S DAY: The Shanghai Composite Index gave up 2.6 percent and Tokyo's Nikkei 225 was off 0.7 percent. Hong Kong's Hang Seng shed 0.1 percent. Seoul's Kospi added 0.2 percent.

GREEK DEBT: European traders were focused on Greece's debt issues after the country's new finance minister won initial support from Paris for his effort to renegotiate the terms of the country's financial bailout. French Finance Minister Michel Sapin said Sunday that while his government wouldn't support canceling the debt, it was willing to consider a new time frame or terms. That, for now, is easing worries that Greece's new government might eventually leave the euro currency block.

CURRENCIES: The dollar fell to 117.36 yen from Friday's 117.43 yen. The euro strengthened to $1.1337 from $1.1285.

BONDS: U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 1.68 percent.

         – by AP Reporter Bernard Condon

 

 

 

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