BUSINESS Surging oil prices and energy companies send stocks higher


Surging oil prices and energy companies send stocks higher


04:35, June 23, 2018

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(Photo: AP)

US stocks are rising Friday to wrap up a turbulent week as energy companies climb along with the price of oil. Oil producers in OPEC agreed to produce more oil, a step investors have expected for the last few weeks. The European Union is following through on its promise to put import taxes on $3.4 billion in US goods including bourbon, peanut butter and orange juice in response to US tariffs on steel and aluminum. President Donald Trump threatened to put a 20 percent tax on cars imported from Europe.

KEEPING SCORE: The S&P 500 index added 13 points, or 0.5 percent, to 2,763 as of 2 p.m. Eastern time. The Dow Jones Industrial Average was on track to break an eight-day losing streak as it gained 190 points, or 0.8 percent, to 24,651. The Dow is down 1.8 percent this week, with Boeing off 5.3 percent and Caterpillar down 6.4 percent. Both companies are having their worst week since March. Makers of chemicals and other basic materials have also lost ground and technology companies have slipped.

The Nasdaq composite rose 2 points to 7,714. The Russell 2000 index of smaller-company stocks gained 1 point, or 0.1 percent, to 1,690.

OIL: Oil prices and energy companies rallied as the countries of OPEC agreed to boost production by almost 1 million barrels per day. Increased production means lower prices, but investors expected that outcome after several weeks of reports that those countries would agree to produce more oil. The move undoes part of a cut in production that OPEC and other producers including Russia instituted at the beginning of 2017.

Oil prices hit a three-year high of about $72 a barrel in May and have declined since then as reports suggested an increase in production was coming. However it’s not clear if some members will be able to ramp up production, and some experts said the increase may be smaller than advertised.

US crude climbed 4.8 percent to $68.67 a barrel in New York. It’s on track for its biggest one-day gain since OPEC agreed to cut production in November 2016. Brent crude, the standard for international oil prices, rose 2.9 percent to $75.16 a barrel in London.

Chevron jumped 2.6 percent to $125.80 and Exxon Mobil picked up 2.3 percent to $81.56. Marathon Oil surged 8.2 percent to $21.56.

TARIFFS: The European Union is enforcing tariffs on $3.4 billion in US products as of Friday in retaliation for duties the Trump administration has put on European steel and aluminum. The taxes are on American products including bourbon, peanut butter and orange juice, and the choices appear designed to create political pressure on Trump and senior US politicians.

EU authorities had said the move was coming in response to the US import duties. On Twitter, Trump threatened to impose a 20 percent tax on cars imported from the EU if barriers to trade are not removed soon. He had previously ordered the US Trade Representative to look into possible tariffs or quotas on imported cars and car parts.

That jolted car companies. In Germany, shares of BMW lost 1.1 percent and Daimler sank 0.3 percent. Daimler fell more than 4 percent Thursday after it said Chinese tariffs on US cars would contribute to a decline in its earnings this year. Ford and Toyota also dipped while Peugeot and General Motors rose.

EARNINGS: Used car dealership CarMax advanced 13.9 percent to $80.92 after its first-quarter results surpassed analysts’ expectations.

Open source software maker Red Hat dropped 12.4 percent to $145.12 after it cut its sales forecasts due to the strengthening dollar. Other technology companies also declined. The industry has been leading the market for more than a year, but it makes more of its sales outside the US than any other major S&P 500 sector. Micron Technology fell 3.7 percent to $57.23 and Nvidia lost 1.9 percent to $252.23.

METALS: Gold slid 0.3 percent to $1,270.70 an ounce. Silver added 0.8 percent to $16.46 an ounce. Copper edged up 0.2 percent to $3.03 a pound.

BONDS: Bond prices inched lower. The yield on the 10-year Treasury note rose to 2.91 percent from 2.90 percent.

CURRENCIES: The dollar rose to 109.94 yen from 109.90 yen. The euro advanced to $1.1660 from $1.1617.

OVERSEAS: The CAC 40 in France climbed 1.3 percent and Britain’s FTSE 100 gained 1.7 percent. In Germany the DAX rose 0.5 percent.

Some Asian markets gained following heavy losses on previous days but finished lower than a week ago. Hong Kong’s Hang Seng index edged up 0.2 percent while Japan’s Nikkei 225 lost 0.8 percent. The South Korean Kospi advanced 0.8 percent.

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