Stocks rose late Monday afternoon, led by gains in energy companies as the price of crude oil jumped to a six-month high. Marathon Oil climbed 5 percent and offshore driller Transocean rose 3.6 percent. Major U.S. stock indexes have fallen for three consecutive weeks.
KEEPING SCORE: The Dow Jones Industrial Average rose 212 points, or 1.2 percent, to 17,747 at 3:12 p.m. Eastern time. The Standard & Poor’s 500 index rose 24 points, or 1.2 percent, to 2,071. The Nasdaq composite gained 71 points, or 1.5 percent, to 4,789.
OIL JUMP: Benchmark U.S. crude rose $1.53, or 3.3 percent, to $47.74 a barrel, its highest price since Nov. 3., following news of continued production troubles in Nigeria and an upbeat forecast from Goldman Sachs. Analysts at the investment bank said the glut in oil that has sent prices down from around $100 in mid-2004 has turned to a “deficit,” and much earlier than it had expected. The analysts expect U.S. crude to rise to about $50 a barrel in the second half of this year. Brent crude, which is used to price international oils, slipped 1 cent to $48.96 per barrel in London.
THE QUOTE: “If it’s oil making headline news, stocks will trade off of oil,” said Anna Rathbun, director of research for investment manager CBIZ Retirement Plan Services. She said she is skeptical there will be any “long-term rally” in stocks, because companies are struggling to increase earnings.
BUFFETT BUYS APPLE: Warren Buffett’s Berkshire Hathaway bought 9.8 million Apple shares in the first quarter, a stake worth nearly $1 billion, as the tech giant traded near its lowest price in almost two years, according to regulatory documents released Monday. Apple rose $3.33, or 3.7 percent, to $93.84.
ENERGY BOOST: Memorial Resource Development rose 75 cents, or nearly 6 percent, to $14.20 per share after rival natural-gas producer Range Resources said it would buy Memorial for $3.3 billion. Range Resources plunged $3.38, or 8 percent, to $38.63.
DRUG DEAL: Anacor Pharmaceuticals rocketed 55 percent to $99.44, a gain of $35.43, after drug giant Pfizer announced a deal to buy the maker of a topical eczema treatment for $5.2 billion. Pfizer rose 16 cents, or 0.5 percent, $33.35.
PAPER CHASE: Tribune Publishing soared $2.59, or 22 percent, to $14.06, after USA Today owner Gannett raised its offer to buy the publisher of the Los Angeles Times, Chicago Tribune and other newspapers. The bigger offer comes one week after Tribune adopted a “poison pill” plan to help it remain independent. Gannett rose 2.9 percent.
EUROPE’S DAY: Britain’s FTSE 100 inched up 0.2 percent while the CAC-40 in France slipped 0.2 percent. Germany’s DAX was closed for a holiday.
CHINESE WEAKNESS: A report over the weekend showed that industrial production growth in China slipped to a year-on-year rate of 6 percent in April from 6.8 percent the previous month, adding to fears of a slowdown in the world’s second-biggest economy.
ANALYST TAKE: The report “paints an altogether gloomier picture,” said David Cheetham, market analyst at XTB. He said the report is worrisome given that China “poured a record amount of fresh credit into the economy for the first quarter.”
FED FOCUS: U.S. interest-rate policy is expected to be a driver in financial markets this week. In addition to planned remarks from several Fed officials, traders will also be monitoring Wednesday’s release of minutes from the last meeting of the Fed policymakers.
ASIA’S DAY: Hong Kong’s Hang Seng gained 0.8 percent. Sydney’s S&P-ASX 200 rose 0.6 percent, and Tokyo’s Nikkei 225 added 0.3 percent. Benchmarks in Taiwan, Singapore and the Philippines rose.
BONDS, CURRENCIES: U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 1.75 percent from 1.70 percent. The dollar rose to 108.98 yen from 108.63 yen and the euro rose to $1.1323 from $1.307.
METALS: Precious and industrial metals prices closed higher. Gold gained $1.50 to $1,274.20 an ounce, silver rose 2 cents to $17.15 an ounce and copper added 2 cents to $2.09 a pound.