Oil-Price Jump Lifts Energy Stocks -- WSJ

By Leslie Josephs and Nicole Friedman 

Energy shares rose as U.S. oil prices settled at a new 2016 high Tuesday, while major U.S. stock indexes drifted higher ahead of a monetary-policy update from the Federal Reserve.

Investors don't expect the Fed to raise interest rates this week, but they will look for hints about the strength of the U.S. economy and whether officials might act in June.

U.S. oil futures settled at a five-month high as the dollar weakened and traders bet on a continued decline in U.S. production. U.S. oil prices have climbed 68% from a 13-year low reached in February on expectations that production would decline in the U.S. and elsewhere and that demand would remain robust. Still, there are few signs that the global oversupply of crude oil is shrinking, analysts say.

Light, sweet crude for June delivery rose $1.40, or 3.3%, to $44.04 a barrel on the New York Mercantile Exchange, the highest settlement since Nov. 10. Energy shares in the S&P 500 rose 1.4%, the most of any sector in the index.

The energy sector is up close to 12% this year but is down more than 16% over the past 12 months. "You have to be a little cautious in some of these energy names," said Bill Nichols, head of U.S. equities at Cantor Fitzgerald.

The Dow Jones Industrial Average added 13.08 points, or 0.1%, to 17990.32. The S&P 500 rose 3.91 points, or 0.2%, to 2091.70. Trading volume of 6.39 billion shares was below the daily average for 2016.

"No one is rushing to the exits," said Gordon Charlop, managing director at brokerage Rosenblatt Securities.

The tech-heavy Nasdaq Composite fell for a fourth session -- its longest losing streak since January -- dropping 7.50 points, or 0.2%, to 4888.28.

Apple shares fell 8.2% in after-hours trading. The iPhone maker reported its first drop in revenue since 2003 and iPhone sales fell for the first time ever in the latest quarter.

Twitter shares were down 14% in postmarket trading after the social-media company reported revenue below analysts' expectations and issued a downbeat outlook for second-quarter revenue.

Procter & Gamble was the biggest laggard in the Dow, dropping $1.86, or 2.3%, to $79.55, shaving nearly 13 points off the index. The maker of household products such as Bounty paper towels reported higher profit but issued a downbeat earnings outlook.

Hershey fell 1.77, or 1.9%, to 89.60 after the candy maker said its profit and revenue declined in the last quarter.

Whirlpool fell 6.61, or 3.6%, to 179.43 after the appliance company posted lower profit.

Health-care shares in the S&P 500 slipped 0.4%. Eli Lilly fell 1.67, or 2.1%, to 76.27 after the drugmaker cut its profit forecast for the year.

The yield on the 10-year Treasury note rose for the seventh consecutive session, to 1.931% Tuesday, from 1.902% on Monday, as prices fell. The last time the yield settled above 2% was in late January.

Meanwhile, many investors expect the Bank of Japan to ease policy further Thursday amid a recent strengthening of the yen and weakening of corporate sentiment and inflation expectations. Japan's Nikkei Stock Average fell 0.5% Tuesday.

The Stoxx Europe 600 edged up 0.2%, with banks and energy companies leading gains.

Write to Leslie Josephs at [e-mail] and Nicole Friedman at [e-mail]

(END) Dow Jones Newswires

April 27, 2016 02:47 ET (06:47 GMT)

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