Marley Jay, Associated Press
Posted:
Thursday, February 18, 2016, 1:08 AM
Stocks climbed Wednesday as investors clung to hope for an international deal to stem a global glut in crude oil with production cutbacks. That sent the price of oil sharply higher, as well as the stocks of major energy companies such as Chevron. Tech stocks also rose, led by Microsoft and Facebook.
The gains capped a three-day rally, the longest so far in 2016, that has wiped out about half of the market's losses since the beginning of the year. The Standard & Poor's 500 index hit its lowest point of the year last Thursday, and has risen about 5 percent since then.
The Dow Jones industrial average gained 257.42 points, or 1.6 percent, to 16,453.83. The S&P; 500 rose 31.24 points, or 1.7 percent, to 1,926.82. The Nasdaq composite index jumped 98.11 points, or 2.2 percent, to 4,534.06.
The price of oil recovered as investors again hoped for an international deal that will cap or cut production. Several OPEC nations are in talks about freezing production at January's levels, but that deal requires all of OPEC's members to agree, and Iran said Wednesday that it won't stop increasing its exports. Still, investors appeared to be encouraged that the countries are talking.
The price of U.S. crude jumped $1.62, or 5.6 percent, to $30.66 a barrel in New York. Brent crude, a benchmark for international oils, rose $2.32, or 7.2 percent, to $34.50 a barrel in London. It's still down 17 percent this year.
Energy stocks climbed along with the price of oil. Chevron rose $3.50, or 4.1 percent, to $88.31, and Hess picked up $2.63, or 6.4 percent, to $43.47. Tech stocks made big gains, led by Microsoft, which added $1.33, or 2.6 percent, to $52.42, and Facebook, which rose $3.59, or 3.5 percent, to $105.20.
For almost six months, stocks have surged and dropped repeatedly as investors worry about issues such as the health of China's economy, the Federal Reserve's plans on interest rates, and plunging oil prices.
While corporate earnings have been shaky, companies that surpassed analysts' expectations were rewarded on Wednesday. Online travel company Priceline climbed after its profit and revenue beat estimates. The stock gained $124.88, or 11.2 percent, to $1,235.56. Expedia rose 5 percent and TripAdvisor added 3 percent. Expedia and TripAdvisor posted strong results last week.
Personal navigation device maker Garmin rose $5.83, or 16.5 percent, to $41.06 after its fourth-quarter profit topped Wall Street estimates.
Pipeline company Kinder Morgan jumped 10 percent on the rise in oil prices and from the news that Warren Buffett's Berkshire Hathaway has taken a 1.2 percent stake in the company. The stock advanced $1.56 and closed at $17.18.
U.S. factories cranked out more cars, furniture and food in January. The Federal Reserve said factory output rose 0.5 percent, the biggest increase since July. Output had fallen in four of the previous five months, and the data suggest that U.S. manufacturing may be recovering after struggling last year. While the strong dollar and weak overseas growth have cut into exports and corporate profits, Americans are spending at a solid pace.
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