Consumer Companies Lead Indexes Higher; Energy Drops

Traders work on the floor of the New York Stock Exchange on Tuesday. (Reuters/Brendan McDermid)
Traders work on the floor of the New York Stock Exchange on Tuesday. (Reuters/Brendan McDermid)

U.S. stocks are climbing Tuesday and consumer stocks are making some of the biggest gains. Solid quarterly results from cruise line operator Carnival are giving travel-related companies a boost. Technology companies are also gaining. Energy companies are slipping with oil prices. A survey showed consumer confidence is at a nine-year high.

KEEPING SCORE: After a slow start, the Dow Jones Industrial Average gained 129 points, or 0.7 percent, to 18,223 as of 2:10 p.m. Eastern time. The Standard & Poor’s 500 index picked up 13 points, or 0.6 percent, to 2,158. The Nasdaq composite rose 44 points, or 0.8 percent, to 5,301. Stocks had fallen for two days in a row, surrendering some of their recent gains.

CONSUMER SURVEY: U.S. consumer confidence reached its highest level in nine years this month. The Conference Board said its index rose to 104.1 as consumers grew more optimistic about the labor market. The result was better than expected and the highest reading on the group’s survey since August 2007.

TRAVELING MUSIC: Carnival and Royal Caribbean made some of the biggest gains on the S&P 500. Carnival rose $1.93, or 4.1 percent, to $48.40 after it reported a solid profit and strong revenue in the third quarter and raised its guidance. Royal Caribbean added $3.01, or 4.2 percent, to $73.98, while Southwest Airlines climbed $1.40, or 3.8 percent, to $38.27 and booking site Expedia gained $4.05, or 3.7 percent, to $113.14.

RISERS: Amazon rose $15.76, or 2 percent, to $814.92. Netflix, which has slumped 15 percent this year, regained $2.68, or 2.8 percent, to $97.24. Alphabet, Google’s parent company, helped pull tech stocks higher as it rose $8.94, or 1.1 percent, to $811.59. Microsoft picked up $1.05, or 1.8 percent, to $57.95.

THE QUOTE: Consumer spending makes up a large portion of U.S. economic activity. Katie Nixon, chief investment officer for Northern Trust, said it’s even more important right now because government spending, exports, and capital spending by businesses are all limited.

“Everything’s riding on the consumer right now,” she said. Recently investors have worried about consumer spending because of disappointing auto sales and retail sales.

OIL SLIDES: Oil prices fell after investors were disappointed again that OPEC countries didn’t make a deal to limit production. A representative for Iran said there probably won’t be any such agreement this week and that oil-producing nations should discuss the issue in November.

U.S. crude fell $1.51, or 3.3 percent, to $44.42 a barrel in New York. The international standard, Brent crude, lost $1.63, or 3.4 percent, to $46.30 a barrel in London. Oil prices rose 3 percent on Monday. Devon Energy lost $1.41, or 3.6 percent, to $38.23 and Halliburton sank 75 cents, or 1.8 percent, to $40.63.

PUT IT ON MY AMEX: American Express gained 88 cents, or 1.4 percent, to $64.30. A federal appeals court ruled late Monday that the company didn’t violate antitrust laws by preventing stores from asking customers to use one credit card over another and steering consumers to another type of payment. On Tuesday, the company said it will buy back as much as 150 million shares of its stock and raised its dividend to 32 cents from 29 cents.

ENERGY DEAL: Oil and natural gas company Rice Energy said it will buy Vantage Energy for $2.7 billion including debt. Rice Energy fell $2.14, or 7.9 percent, to $25.01. The Vantage business will become part of a separate Rice company called Rice Midstream Partners, and shares of that partnership rose $1.05, or 4.9 percent, to $22.36.

BONDS: Bond prices continued to rise. The yield on the 10-year Treasury note fell to 1.56 percent from 1.58 percent. Bond yields have been slipping for more than a week as investors waited for the Federal Reserve to make a decision on interest rates. Last Wednesday the Fed announced it was leaving rates where they are for now. Phone companies traded higher, as they pay big dividends and are more appealing when bond yields are low. AT&T climbed 35 cents to $41.49.

CHESA-OFF-PEAK: Chesapeake Energy fell following another sign activist investor Carl Icahn is reducing his involvement with the oil and gas company. On Tuesday, Chesapeake said two directors resigned from its board. One of them, Vincent Intrieri, is a longtime associate of Icahn. Earlier this month Icahn cut his stake in the company to 4.6 percent from 9.4 percent. The stock slid 54 cents, or 8.2 percent, to $6.08.

FOUL WEATHER: Oilfield services company Weatherford International skidded after the Securities and Exchange Commission said Weatherford agreed to pay a $140 million penalty to end an investigation into its accounting practices. The SEC said the company used “deceptive income tax accounting” to make its earnings larger in 2011 and 2012. The stock sank 30 cents, or 5.5 percent, to $5.21.

METALS: The price of gold fell $13.70, or 1 percent, to $1,330.40 an ounce. Silver fell 43 cents, or 2.2 percent, to $19.17 an ounce. Copper lost 3 cents to $2.17 a pound.

CURRENCIES: The dollar fell to 100.31 yen from 101.34 yen. The euro slid to $1.1219 from $1.1255.

OVERSEAS: France’s CAC-40 lost 0.2 percent while Germany’s DAX fell 0.3 percent. The FTSE 100 index of leading British shares was 0.2 percent lower. Hong Kong’s Hang Seng index rose 1.1 percent and Tokyo’s Nikkei 225 gained 0.8 percent. Seoul’s Kospi advanced 0.9 percent.

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