US stock indexes post modest gains as oil prices rise
Oil and gas exploration companies have led US stocks modestly higher, giving the market its second gain in two days.
Energy stocks, already the best-performing category this year, got a boost from US crude oil prices, which climbed to 51.60 US dollars a barrel, the highest level in 15 months.
Investors brushed off new data showing residential construction slowed last month. Instead, the focus remained on the latest crop of companies reporting quarterly results.
Overall earnings for companies in the Standard & Poor's 500 index have been down on an annual basis in the past five quarters. But the results so far suggest the start of a turnaround, said Paul Christopher, head global market strategist for Wells Fargo Investment Institute.
"We do think the earnings recession is ending," Mr Christopher said. "We're still early in the reporting season, but we see so far the trends that we're looking for."
The Dow Jones industrial average gained 40.68 points, or 0.2%, to 18,202.62. The S&P 500 index rose 4.69 points, or 0.2%, to 2,144.29. The Nasdaq composite index added 2.58 points, or 0.1%, to 5,246.41.
Indexes wavered between small gains and losses in early trading on Wednesday, then turned higher by midday and stayed higher for the rest of the day.
Morgan Stanley rose 1.9% after the investment bank said its earnings soared 62% in the third quarter, thanks to big gains in bond trading. Goldman Sachs disclosed similar results Tuesday.
Quarterly results from other companies failed to impress traders.
Intel, which issued a downbeat earnings outlook late on Wednesday, slumped 5.9%.
Manhattan Associates tumbled 10.4% after the business software company reported weak quarterly sales and cut its revenue outlook.
Lighting maker Cree also served up weak sales and an earnings outlook that fell short of Wall Street's expectations. The stock tumbled 11.1%.
About 80 of the companies in the S&P 500 were scheduled to report quarterly results this week. Earnings for the third quarter are projected be down about 0.9% overall from a year ago, according to S&P Global Market Intelligence. That forecast is largely due to the energy sector, which has been hard hit by falling energy prices.
That was not the case on Wednesday.
A report of a drawdown in oil inventories helped lift crude prices. US benchmark crude oil gained 2.6% to close at 51.60 US dollars a barrel in New York. Brent crude, the international standard, added 1.9% to close at 52.67 US dollars a barrel in London.
The pick-up in oil prices sent shares in several energy, exploration and drilling services companies higher.
Transocean jumped 5.7%, while Halliburton rose 4.3% and Newfield Exploration climbed 3.9%.