U.S. stocks continue to rise Tuesday as the price of oil inches higher. Energy companies are gaining the most, while a drop in bond yields is sending high-dividend phone company stocks higher. Drug companies are tumbling on disappointing results from clinical studies.
KEEPING SCORE: The Dow Jones industrial average rose 77 points, or 0.4 percent, to 17,997 as of 1 p.m. Eastern time. The Standard & Poor’s 500 index added 9 points, or 0.4 percent, to 2,118. The Nasdaq composite index lagged as drug company stocks fell, gaining just 10 points, or 0.2 percent, to 4,978.
OIL: Benchmark U.S. crude oil added 34 cents to $50.03 a barrel in New York. Brent crude, which is used to price international oils, added 54 cents, or 1.1 percent, to $51.09 a barrel in London.
Among energy companies, Chevron rose $2.33, or 2.3 percent, to $103.50 while Newfield Exploration added $1.94, or 4.9 percent, to $41.88. Helmerich & Payne gained $2.27, or 3.5 percent, to $67.01.
THE QUOTE: The dollar plunged following Friday’s jobs report as investors concluded that the Fed won’t raise interest rates any time soon. That has helped energy companies by putting upward pressure on the price of crude oil.
“When you get a Fed that is now perceived to be lower for longer (on interest rates), with a dollar that is less likely to rally, and an economy that may be slowing but is not in recession, that has tended to be a positive for those stocks in 2016,” said Julian Emanuel, U.S. equities and derivatives strategist for UBS.
AROUND THE MARKET: Bond prices rose, sending the yield on the 10-year U.S. Treasury note down to 1.71 percent from 1.74 percent. That made bonds less appealing, and sent income-seeking investors into phone company stocks. Verizon added 95 cents, or 1.9 percent, to $51.66. Industrial stocks rose as airlines traded higher. Southwest Airlines picked up $1.48, or 3.5 percent, to $43.2 and Delta rose $1.34, or 3.2 percent, to $42.62.
TASTY: Organic and specialty foods distributor United Natural Foods posted a larger-than-expected profit in its fiscal third quarter, and the company raised its projections for the year. Its stock jumped $5.94, or 15.3 percent, to $44.77.
ZILLOW SETTLES: Real estate website Zillow Group said it agreed to pay $130 million to settle a lawsuit over trade secrets brought by Move Inc., the National Association of Realtors, and others. The stock gained $1.86, or 6.1 percent, to $32.19.
BIOGEN BOUNCED: Drugmaker Biogen tumbled $33.97, or 11.7 percent, to $255.87 after the company said an experimental multiple sclerosis drug, opicinumab, failed in a mid-stage clinical trial. Stifel Nicolaus analyst Thomas Shrader said opicinumab is a key product for Biogen. He wrote that Biogen’s MS drug Tecfidera has “stalled” and newer therapies could hurt sales of Tysabri, an older drug.
STUDY HITS ALEXION: Alexion Pharmaceuticals said a study of its drug Soliris failed, and its stock lost $16.37, or 10.6 percent, to $138.62. The company gets almost all of its revenue from Soliris, which is approved to treat two rare blood disorders, and an additional approval could have strengthened its sales.
MORE TROUBLE FOR VALEANT: Canadian drugmaker Valeant Pharmaceuticals disclosed its delayed quarterly results. The company said it took a loss and cut its profit and revenue estimates for the year. Its stock gave up $4.19, or 14.5 percent, to $24.66.
POLO-NO: Ralph Lauren said it will close about 50 stores and cut approximately 1,200 jobs as part of a restructuring plan that is intended to save the company about $200 million a year. It expects to take more than $500 million in one-time charges related to the move. The retailer’s stock fell $2, or 2.1 percent, to $94.33.
OVERSEAS: Germany’s DAX rose 1.6 percent and the CAC-40 in France was up 1.2 percent. The FTSE 100 index of leading British shares edged up 0.2 percent after a hefty gain on Monday. Asian stock markets posted strong gains earlier. Japan’s Nikkei 225 rose 0.6 percent and South Korea’s Kospi gained 1.3 percent. Hong Kong’s Hang Seng Index advanced 1.4 percent.
CURRENCIES: The dollar slipped to 107.37 yen from 107.40 yen. The euro fell to $1.1346 from $1.1373.
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