US stocks set for best day of 2016 as energy and tech rise

NEW YORK (AP) — U.S. stocks are climbing Friday, on pace for their best day in a difficult year. The price of oil has jumped 21 percent in the last two days, and energy stocks are rising. Tech stocks are also advancing.

KEEPING SCORE: The Dow Jones industrial average gained 173 points, or 1.1 percent, to 16,055 as of 3:07 p.m. Eastern time. The Standard & Poor's 500 index rose 33 points, or 1.8 percent, to 1,902. The Nasdaq composite climbed 103 points, or 2.3 percent, to 4,574.

Despite a big loss on Wednesday, the S&P 500 is up 1.1 percent this week and the Nasdaq is up almost 2 percent.

ENERGY PRICES RISE: U.S. crude rose $2.66, or 9 percent, to $32.19 a barrel in New York. Brent crude, a benchmark for international oils, rose $2.93, or 10 percent, to $32.18 a barrel in London.

Oil is trading at its lowest price in 12 years but has surged in the last two days. Friday's close was the highest in two weeks.

ENERGY STOCKS: Pipeline operator Kinder Morgan rose $1.52, or 10.9 percent, to $15.39 after it jumped 16 percent Thursday. Pipeline company Williams Cos. added $3.12, or 19.5 percent, to $19.16. Devon Energy gained 83 cents, or 3.4 percent, to $25.01.

CHANGES FOR ENERGY: Goldman Sachs analyst Jeffrey Currie said energy prices have fallen so far that the industry is making real cuts in production. "We are now at a price level that is creating real fundamental change," he said.

Currie said it will take a long time for the market to recover from the huge decline in energy prices. But he said prices are down because of a supply glut, not because demand is collapsing.

Low energy prices are good for many industries and consumers, but investors have gotten nervous that falling energy prices foretell a big slowdown in the global economy.

TECH STOCKS LOG ON: Big tech stocks rallied. Shares of Apple, which have lost about a quarter of their value in the last six months, rose $4.35, or 4.5 percent, to $100.65. Microsoft gained $1.70, or 3.4 percent, to $52.18 and Facebook added $3.67, or 3.9 percent, to $97.83.

GLOBAL GAINS: Japan's Nikkei 225 index rose 5.9 percent Friday as investors hope the Bank of Japan will promise more stimulus for the country's economy. The Nikkei had its day since September. Earlier this week the index entered a bear market, meaning it was down 20 percent from a recent peak.

South Korea's Kospi gained 2.1 percent and Hong Kong's Hang Seng added 2.9 percent. The Shanghai Composite Index in mainland China climbed 1.3 percent.

EUROSTEP: A rally in Europe got stronger as investors there hoped for more stimulus as well. On Friday European Central Bank head Mario Draghi said the bank has a lot of options to boost inflation and is determined and willing to act. On Thursday Draghi suggested the ECB will consider more stimulus action at its next meeting in March.

France's CAC 40 added 3.1 percent and Germany's DAX rose 2 percent. Britain's FTSE 100 climbed 2.2 percent.

SOME RELIEF: Major indexes in the U.S. are set to rise for the first week in the last four. Stocks have been pummeled in 2016 as investors worry about the global economy. The Dow and S&P 500 have never gotten off to a worse two-week start to a new year. A large sell-off Wednesday made the rout even worse, but stocks have recovered Thursday and Friday.

GREEN SHOOTS: Telecommunications and utilities stocks also rose Friday and turned positive for the year. They're both up 1 percent while the other eight industrial sectors in the S&P 500 are much lower in 2016. Last year the S&P 500 utility index fell 8 percent and telecom stocks fell 2 percent.

THE QUOTE: Jim Paulsen, chief investment strategist for Wells Capital Management, said investors turn to utilities and telecom stocks when the market gets rough. Companies in those industries pay relatively large dividends, which means their prices are more stable and the stocks behave almost like bonds.

"They are just the most conservative sector of the stock market," he said.

SCHLUMBERGER's PLANS: The largest oilfield services company in the world said it cut 10,000 jobs in the fourth quarter after eliminating some 20,000 earlier in 2015. However Schlumberger said it will buy back $10 billion in stock. Its share price has fallen 25 percent over the last year. The stock rose $3.48, or 5.7 percent, to $64.93.

AMEX TUMBLES: Credit card company American Express said it wants to cut $1 billion in spending in the next two years in response to the strong dollar, which hurts its revenue, and tough competition. Its stock fell $7.83, or 12.5 percent, to $54.83, taking it to three-year lows.

FREEPORT FREEFALLING: Gold and copper producer Freeport-McMoRan tumbled 39 cents, or 9.1 percent, to $3.94. Its shares have dropped 42 percent in 2016 after huge plunges the previous two years. The company has struggled as metals prices have fallen, and its decision a few years ago to invest in oil and gas came shortly before those prices also plunged.

GE STRUGGLES: General Electric's fourth-quarter revenue fell short of analysts' estimates. The company's industrial division struggled. That has been an area of renewed focus for GE as it sells off financial businesses and its appliance unit. GE lost 36 cents, or 1.3 percent, to $28.23.

BONDS: U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 2.05 percent from 2.03 percent a day earlier.

METALS: The price of gold fell $1.90 to $1,096.30 an ounce and silver fell 3.7 cents to $14.06 an ounce. Copper rose 0.6 cents to $2.003 a pound.

CURRENCIES: The dollar rose to 118.73 yen from 117.50 on Thursday. The euro weakened on the prospect of further ECB stimulus. It fell to $1.0795 from $1.0875.

By Marley Jay, AP Markets Writer. Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
The Gayly - 1/22/2016 @ 2:47 p.m. CST