Stocks on the rise on Wall Street amid oil and mining boosts
US stocks rose for the third day in a row on Wednesday as machinery and mining companies traded higher. Oil prices also continued their rise, and stocks and oil prices are at their highest in almost a year.
Metals prices jumped as the dollar got weaker. Also trading higher were makers of beverages and other consumer goods.
That is because a weaker dollar could mean better sales and bigger profits for US companies that do a lot of business overseas.
Kate Warne, an investment strategist for Edward Jones, said the dollar weakness will not last: the Federal Reserve is preparing to eventually raise interest rates, which will make the dollar stronger, while stimulus policies of central banks in Europe and Japan will cause their own currencies to depreciate.
"The dollar will bounce around," she said. "It's not likely to weaken a whole lot given the gap in central bank policies."
The Dow Jones industrial average rose 66.77 points, or 0.4%, to 18,005.05. The Standard & Poor's 500 index gained 6.99 points, or 0.3%, to 2,119.12. The Nasdaq composite added 12.89 points, or 0.3%, to 4,974.64. The S&P 500 and oil prices are both at their highest levels since July, and the Nasdaq has not been this high since December 31.
Machinery maker Caterpillar rose 1.30 dollars, or 1.7%, to 78.11 dollars and engine maker Cummins picked up 1.72 dollars, or 1.5%, to 118.87 dollars. Gold and copper producer Freeport-McMoRan added 34 cents, or 3%, to 11.58 dollars and gold producer Newmont Mining gained 43 cents, or 1.2%, to 35.38 dollars.
The dollar declined to 106.94 yen from 107.31 yen late Tuesday. The euro edged up to 1.1397 from 1.1361 dollars. The dollar has been very strong over the last few years but slipped a bit in the wake of Friday's disappointing jobs report.
The price of gold jumped 15.30 dollars, or 1.2%, to 1,262.30 dollars an ounce and silver leaped 59 cents, or 3.6%, to 16.99 dollars an ounce. Copper added 1 cent to 2.06 dollars a pound.
Oil prices continued to rise. Benchmark US crude rose 87 cents, or 1.7%, to 51.23 dollars a barrel in New York. Brent crude, the benchmark for international oil prices, jumped 1.07 dollars, or 2.1%, to 52.51 dollars a barrel in London.
Brown-Forman, the maker of Jack Daniel's and other liquor brands, gained ground after it reported strong fourth-quarter results. The stock gained 3.45 dollars, or 3.5%, to 100.80 dollars. Competitor Constellation Brands, which makes Corona, Negra Modelo and Pacifico beers, rose 2.95 dollars, or 2%, to 154.06 dollars and Molson Coors rose 1.89, or 1.9%, to 103.60 dollars.
Other makers of household goods also rose. Kellogg added 92 cents, or 1.2%, to 76.08 dollars and PepsiCo edged up 69 cents to 103.18 dollars.
Utility companies gained ground as bond yields fell. Utilities are stable, dividend-paying investments that are often compared to bonds, and investors bought them as yields decreased. NextEra Energy rose 1.81 dollars, or 1.5%, to 122.92 dollars and Duke Energy added 52 cents to 80.51 dollars.
VeriFone Systems, which makes terminals used for electronic payments, slashed its annual forecast after it reported disappointing quarterly results. The company said it will eliminate jobs and review some of its struggling businesses. The stock gave up 6.96 dollars, or 24.7%, to 21.27 dollars.
Restaurant chain Dave & Buster's climbed 4.29 dollars, or 10.2%, to 46.15 dollars after the company reported strong first-quarter results and raised its outlook for the year.
Headphones maker Skullcandy surged after the company's founder said he might want to take the company private. Rick Alden, Skullcandy's largest shareholder, disclosed the idea in a form filed with the Securities and Exchange Commission.
Skullcandy stock climbed 63 cents, or 16%, to 4.56 dollars.
In other energy trading, wholesale petrol gained 3 cents to 1.62 dollars a gallon. Heating oil picked up 3 cents to 1.57 dollars a gallon. Natural gas was unchanged at 2.47 dollars per 1,000 cubic feet.
Germany's Dax was down 0.7% and France's CAC-40 shed 0.6%. Britain's FTSE 100 added 0.3%. Tokyo's Nikkei 225 gained 0.9% and Seoul's Kospi advanced 0.8%.
U.S. government bond prices rose. The yield on the 10-Year U.S. Treasury note fell to 1.70% from 1.72%.