U.S. stock indexes closed mostly higher Wednesday after a sharp increase in crude oil prices helped drive market-leading gains for energy companies.
Banks and other financial stocks declined the most as bond yields headed lower, which translates into lower interest rates on loans and lower profits for banks.
The Dow Jones industrial average ended in the red, while the Standard & Poor’s 500 index and Nasdaq composite eked out modest gains. Two stocks rose for every one that fell on the New York Stock Exchange.
“After yesterday’s bounce back, you’re seeing a little sideways action today,” said Jeff Zipper, managing director at the Private Client Reserve of U.S. Bank.
The S&P 500 index added 2.56 points, or 0.1 percent, to 2,361.13. The Dow fell 42.18 points, or 0.2 percent, to 20,659.32. The Nasdaq composite index gained 22.41 points, or 0.4 percent, to 5,897.55.
Bond prices rose. The 10-year Treasury yield fell to 2.39 percent from 2.42 percent.
A day after Wall Street rallied on news that U.S. consumer confidence reached its highest level since 2000, the market got another dose of encouraging economic data Wednesday.
The National Association of Realtors said more people signed contracts to buy U.S. homes last month as warm weather and rising confidence appeared to encourage consumers to look for houses. The NAR’s pending home sales index climbed 5.5 percent in February to 112.3, its highest point since April and its second-highest point since 2006.
Investors are hoping that Congress and the White House will enact tax cuts and other business-friendly policy proposals promised by President Donald Trump during his campaign.
Those expectations helped lift the market in the weeks after the election last November. But some of that investor optimism dimmed in recent weeks after the Trump administration’s bid to pass a bill intended to begin repealing the Affordable Care Act failed to win enough votes.
Traders also welcomed news of corporate deals.
Exar surged 22.3 percent after MaxLinear agreed to buy the chipmaker for $13 per share, or $662 million. Shares in Exar gained $2.37 to $12.99. MaxLinear rose $1.55, or 5.8 percent, to $28.06.
Vertex Pharma vaulted 20.5 percent after the drugmaker disclosed results from two studies of a new cystic fibrosis treatment.
Several major overseas stock indexes closed higher.
In Europe, Germany’s DAX climbed 0.4 percent, while France’s CAC 40 added 0.5 percent. Britain’s FTSE 100 gained 0.4 percent against the backdrop of Britain triggering the start of its exit from the European Union.
Energy prices closed sharply higher as traders weighed remarks from Iran’s oil minister
Oil prices climbed after Iran’s oil minister said the recent production cut deal will probably be extended, and fighting in Libya is affecting its oil industry.
Benchmark U.S. crude oil futures rose $1.14, or 2.4 percent, to close at $49.51 a barrel in New York. The contract rose 64 cents on Tuesday. Brent crude, used to price international oils, climbed $1.09, or 2.1 percent, to close at $52.42 a barrel in London. Natural gas added 8 cents to $3.18 per 1,000 cubic feet, wholesale gasoline rose 4 cents to $1.67 per gallon and heating oil gained 3 cents to $1.54 per gallon.