NS: U.S. stock indexes up modestly as oil recoups some losses
Stocks are off to a mixed start Tuesday, while energy companies rose along with the price of crude oil.
ON WALL STREET: The Standard & Poor’s 500 index was up 3.2 points, about 0.1 percent, at 2,344.4.
The Dow Jones industrial average gained 33.9 points, about 0.2 percent, to 20,584.9. The Nasdaq composite slipped 2.1 points, about 0.04 percent, to 5,837.8.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.37 percent.
MAKING MOVES: Newfield Exploration rose 1.3 percent in the first few minutes of trading Tuesday. Industrial companies were lower. Northrop Grumman fell 0.5 percent. Darden Restaurants, owner of Olive Garden, gained 6 percent and software company Red Hat rose 5 percent after reporting results that beat analysts’ expectations.
INVESTORS WORRY: Worries that Washington may not be able to help businesses as much as once thought knocked stock indexes down hard early Monday, but they clawed back most of their losses and ended the day mixed. The S&P lost 0.1 percent to 2,341.59 for its seventh drop in the last eight sessions. The Dow sank 0.2 percent, to 20,550.98.
TRUMP SLUMP: Last week’s failure by Republicans to repeal the Affordable Care Act, which they have pledged to do for years, raised doubts that Washington can push through other promised changes to help businesses. Investors have been anticipating that President Donald Trump and the Republican-led Congress will cut taxes, loosen regulations for companies and institute other corporate-friendly policies.
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ANALYST’S TAKE: “Markets appear reluctant to take the Trump disappointment too much further at this stage,” analyst Ric Spooner of CMC Markets said in a report. “With U.S. economic growth showing signs of improvement and the Fed clearly embarked on a monetary tightening cycle, the significant correction that has already occurred in bonds and the U.S. dollar may already reflect an adequate wind back of the market’s Trump exuberance.”
OIL PRICES: Benchmark U.S. crude gained 52 cents to $48.25 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 24 cents on Monday to $47.73. In London on the Intercontinental Exchange Europe, Brent crude, used to price international oils, rose 48 cents to $51.23 a barrel. It lost 2 cents the previous session.
OIL WORRIES: Oil prices have sagged below $50 — a boon to importers but a blow to developing countries that rely on crude sales to pay for imports. Benchmark U.S. crude could fall to $40 per barrel before tight oil producers cut back and supply stops increasing, analyst Carl B. Weinberg of High-Frequency Economics said in a report. “Oil-producing emerging economies will earn less foreign currency,” said Weinberg. “This will impair their ability to import: World trade will resume its persistent decline.”
AMERICAN AIRLINES: American Airlines agreed to pay $200 million for a stake in China Southern Airlines, the biggest of China’s three major state-owned carriers, to gain better access to the country’s growing travel spending. China Southern said the two airlines will expand commercial cooperation, possibly in sales, airport facilities and code-sharing.
