Gains in energy and Internet companies helped drive stocks broadly higher on Wall Street on Thursday, snapping a two-day slump for the market in an otherwise choppy week of trading.
The gains were initially fueled by rising oil prices, which boosted energy companies after a suspected attack on two oil tankers in the strategic Strait of Hormuz. The sector sustained its gains as a mix of media, Internet and consumer-oriented companies took the lead in pushing every major index higher. Small-company stocks rose more than the rest of the market.
The S&P 500 index rose 11.80 points, or 0.4%, to 2,891.64. The benchmark index has been seesawing this week, opening strong on Monday, and then falling for two straight days before reversing course again on Thursday. The uneven week follows the index's best week of 2019.
The Dow Jones industrial average gained 101.94 points, or 0.4%, to 26,106.77. The Nasdaq composite added 44.41 points, or 0.6%, to 7,837.13. The Russell 2000 index of small-company stocks climbed 16.01 points, or 1.1%, to 1,535.80.
Investors have been searching for direction as they cautiously await any new developments on the global trade war between the U.S. and China. Any continued escalations could crimp global economic growth and put the brakes on what is poised to be the longest economic expansion in U.S. history.
Anticipation of next week's Federal Reserve meeting of policyholders helped lift the market Thursday, said Jeff Zipper, managing director at U.S. Bank Private Wealth Management.
"You've got two competing forces here right now," Zipper said. "The lingering issue of when is this trade tariff deal going to get resolved, and a more dovish Fed."
Last week, Fed Chairman Jerome Powell set off a market rally after he signaled that the central bank is willing to cut interest rates to help stabilize the economy if the trade war between Washington and Beijing starts to crimp growth.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.10% from 2.12% late Wednesday.
U.S. stock indexes rebounded early on Thursday as oil prices surged on news of a suspected attack on two oil tankers in the strategic Strait of Hormuz.
The incident in the Strait of Hormuz comes amid heightened tensions between the United States and Iran. One-third of all oil traded by sea, which amounts to 20% of oil traded worldwide, passes through the strait. The U.S. blamed Iran in what it called a campaign of "escalating tensions" in a region crucial to global energy supplies.
Benchmark U.S. crude rose 2.2% to settle at $52.28 a barrel. Brent crude oil, the international standard, added 2.2% to close at $61.31 a barrel. The gains come at a time when oil prices have been falling on signs demand is declining.
Analysts questioned whether the gains can hold. Jim Ritterbusch of Ritterbusch & Associates said in a note to clients the jump is factoring in a worst-case scenario and oil is "apt to relinquish the bulk of gains as additional details emerge."
In addition, OPEC added to the recent concerns among traders that global demand is slipping. In its latest monthly report on the oil market, OPEC forecast demand would grow by 1.4 million barrels a day in 2019, down by 700,000 barrels a day from its previous forecast. OPEC said it lowered the forecast because of "sluggish oil demand data" from Western countries during the first quarter. While global demand appears to be slipping, supplies remain high.
The surge in oil prices lifted shares of oil services companies and oil producers. Schlumberger gained 3.4%.
Walt Disney gained 4.4%, leading a mix of media and Internet companies higher. Shares in Google parent Alphabet rose 1.1% and Facebook gained 1.4%.
Tapestry's 3.9% gain led a mix of consumer-oriented stocks higher, including Macy's, home-improvement retailers Home Depot and Lowe's, and homebuilders. Those companies caught an extra boost from the latest mortgage-rate figures, which remain near historic lows.
Higher fares gave major airlines a boost. American Airlines confirmed that it raised domestic fares $5 each way. J.P. Morgan said Southwest Airlines followed by raising prices on tickets bought within a week of the flight and favored by business travelers. The moves mark the second round of fare increases in just over a month.
American Airlines surged 6.4%, Delta gained 1.9% and Southwest rose 3.1%.
In other energy futures trading, wholesale gasoline rose 2% to $1.72 per gallon. Heating oil gained 1.5% to $1.81 per gallon. Natural gas fell 2.6% to $2.33 per 1,000 cubic feet.
Gold rose 0.4% to $1,336.80 per ounce, silver inched 0.1% higher to $14.75 per ounce and copper fell 0.7% to $2.65 per pound.
The dollar fell to 108.34 Japanese yen from 108.48 yen on Wednesday. The euro weakened to $1.1279 from $1.1286.
Business on 06/14/2019
Print Headline: Jump in oil prices helps give U.S. stocks a boost