Energy Shares Lead US Stocks Higher – Wall Street Journal

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U.S. stocks rose Monday to start the week, led by energy shares that climbed with the price of oil.

Energy companies in the S&P 500 gained 1.7%, and U.S. crude oil climbed as production outages continued.


Investors’ concerns about the pace of world-wide economic growth helped drag stocks sharply lower at the start of 2016. Major indexes have since climbed into positive territory for the year, though the rally has slowed and the Dow industrials and S&P 500 have fallen for three consecutive weeks.

“It helps that oil prices have gone up, supporting energy stocks,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management. “I am more cautious than I was last week, because until we get to a new high, these levels are pretty reasonable.”

The Dow Jones Industrial Average rose 160 points, or 0.9% to 17696. The S&P 500 gained 0.9% and the Nasdaq
NDAQ


0.44
%




Composite Index added 1.1%.

U.S. crude oil rose 3% to $47.60 a barrel. Analysts at Goldman Sachs
GS


0.48
%




said the oil market is now in shortfall after recent outages from large producers such as Canada and Nigeria. The bank remains relatively negative on the oil price, and now expects $45 oil by the first quarter of 2017.

Williams Companies
WMB


5.50
%




rose 5.5%. Marathon Oil
MRO


5.06
%




gained 5.4%, and FMC Technologies
FTI


5.01
%




climbed 4.8%.

Technology firms in the S&P 500 rose 1.2% Monday, lifted by a 3.5% gain from Apple after Warren Buffett’s Berkshire Hathaway
BRK.B


0.40
%




took a new $1 billion stake in the technology giant in the first quarter. Apple shares had fallen about 13% through last week since the company in April reported its first quarterly revenue decline in 13 years.

A slump in consumer-focused companies helped major indexes close lower Friday, outweighing a strong report on retail sales. Some investors said that after a big rally from February’s lows, better earnings were the key to further gains.

“The next leg up has to be better news, and that’s going to take some time to show up,” said Bob Doll, senior portfolio manager at Nuveen Asset Management.

The Stoxx Europe 600 rose less than 0.1%. Holidays across the region were expected to keep trading volumes light while global stocks struggled for momentum Monday as disappointing Chinese data fueled concerns about the world’s second-largest economy.

China’s industrial production, retail sales and investment data released over the weekend all came in below expectations despite recent monetary stimulus measures. China’s central bank said on its website that monetary policy remained unchanged, but it pledged to remain “prudent” and ensure sufficient liquidity.

“There’s so much uncertainty about China, the effects of the slowdown in the economy there, and what the implications of that are globally,” said George Maris, a portfolio manager at Janus Capital Group.
JNS


1.59
%





Earlier, stocks in Hong Kong led Asian markets higher, as analysts said investors there had already priced in concerns about the Chinese economy in a recent bout of selling. The Hang Seng
HSNGY


-0.26
%




Index ended up 0.8%, after three weeks of losses took it to its lowest level since the start of March.

Stocks in Japan also ended a touch higher amid speculation the government could soon announce fresh fiscal stimulus, including a possible delay to a sales-tax increase, ahead of a meeting of the Group of Seven major industrialized countries.

Gold rose 0.1% to $1,274 an ounce.

The 10-year Treasury note yield rose to 1.747% from 1.705% on Friday.


Write to Aaron Kuriloff at aaron.kuriloff@wsj.com and Riva Gold at riva.gold@wsj.com