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Stocks rise on jump in oil prices { June 17 2005 } Original Source Link: (May no longer be active)
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June 17, 2005 07:29 PM ET
Stocks rise on jump in oil
NEW YORK (Reuters) - U.S. stocks ended higher on Friday, helped by a jump in energy and mining companies' shares as oil and metals prices soared to record highs, while an index of consumer confidence rose for the first time this year.
Stock investors jumped on the commodities bandwagon, snapping up Exxon Mobil Corp. and rival oil company ConocoPhillips , which helped push the broad S&P 500 into positive territory for the year.
Exxon Mobil, the world's biggest publicly traded oil company, rose 1.3 percent to $60.89 and ConocoPhillips gained 3.6 percent to $60.68, after U.S. oil futures hit a fresh intraday record at $58.60 a barrel.
Caterpillar Inc., which gave the biggest lift to the blue-chip Dow, rose almost 2 percent to $100.20, as the heavy equipment maker benefited from the boom in mining and metals prices. Copper futures hit a record in London and repeatedly set 16-year highs in New York.
"Oil up a buck-and-a-half is helping the energy stocks," said Peter Boockvar, equity strategist at Miller Tabak & Co., in an interview before the oil futures trading session ended.
The Dow Jones industrial average ended up 44.42 points, or 0.42 percent, at 10,623.07. The Standard & Poor's 500 Index closed higher by 6.00 points, or 0.50 percent, at 1,216.96. The tech-laced Nasdaq Composite Index edged up 0.96 of a point, or 0.05 percent, to 2,090.11.
For the week, the Dow was up 1.05 percent, the S&P 500 rose 1.57 percent and the Nasdaq climbed 1.31 percent.
After the bell, shares of Johnson & Johnson slipped to $65.76 on the Inet electronic brokerage network after the health-care products company said it was continuing talks with Guidant regarding a recall of some of the implantable heart defibrillators that Guidant makes. Johnson & Johnson, a Dow component, ended the regular session up 0.4 percent at $66.56.
CONSUMERS SPEND, OIL RISES
"The consumer has a bit more confidence and is out there spending money," said Joseph Battipaglia, chief investment officer for brokerage and research firm Ryan, Beck & Co.
On Friday morning, Wall Street got good news when the University of Michigan's early reading on consumer confidence for June rose to 94.8 for its first gain this year, market sources said, well ahead of May's reading of 86.9 and higher than analysts had expected.
"The only impediment that's still up there is, of course, the price of oil," Battipaglia said.
While high oil prices are generally negative for stocks -- and indeed trimmed the market's gains in afternoon trading -- they help energy companies' profits.
Oil prices set a new record of $58.60 a barrel during the NYMEX session after the United States and other Western nations shut consulates in oil-producing Nigeria following a terrorist threat.
U.S. crude for July delivery settled at a record $58.47, up $1.89.
Alcoa Inc. , the world's largest aluminum producer and another Dow component, rose 1.2 percent, or 32 cents, to $28.25 as aluminum prices stayed at lofty levels.
On the Nasdaq, Millennium Pharmaceuticals Inc. jumped nearly 14 percent, or $1.14, to $9.40 against a backdrop of speculation that the company could be a takeover candidate, analysts said.
On Thursday, Millennium said the New England Journal of Medicine published positive reports on two of its products, an oncology drug, Velcade, and MLN02, an investigative treatment for inflammatory bowel diseases.
INVESTORS IGNORE DEFICIT
Home builders' shares also gained. Smith Barney raised its ratings on six home builders, including KB Home , which posted a 78 percent rise in quarterly earnings on Thursday.
KB rose 6.9 percent, or $5, to $77.25 and Pulte Homes Inc. gained 4.6 percent, or $3.75, to $86.
Among decliners, Adobe Systems Inc. weighed on the Nasdaq, sliding 3.3 percent, or $1.07, to $31.34, a day after the company provided an outlook that was not as aggressive as investors had hoped.
Stock markets shrugged off news that the U.S. current account deficit -- the broadest measure of U.S. trade with the rest of the world -- hit a record $195.1 billion in the first quarter.
Volume was high as Friday marked quadruple witching -- the quarterly expiration of four different types of June futures and options contracts. Expiration can lead to greater volume and volatility as investors adjust or exercise their derivative positions.
The New York Stock Exchange said first-hour volume reached an all-time high of 704,370,000 shares.
By the close, about 1.94 billion shares had been traded on the New York Stock Exchange, well above the 1.46 billion daily average for last year.
On Nasdaq, about 2.11 billion shares were traded, above the 1.81 billion daily average last year.
Advancers outnumbered decliners on the New York Stock Exchange by about 5 to 3.
But on Nasdaq, decliners edged out advancers by about 16 to 15.
(Additional reporting by Deena Beasley and Martinne Geller)
Copyright 2005 Reuters
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