US stocks ring in 2017 with gains as energy companies rise

By MARLEY JAY

Associated Press

NEW YORK — U.S. stock indexes are jumping on the first trading day of 2017. Energy companies are climbing with the price of oil, while banks are advancing thanks to a bump in interest rates. Those two sectors had the biggest gains in the market last year.

KEEPING SCORE: The Dow Jones industrial average leaped 120 points, or 0.6 percent, to 19,882 as of 10:45 a.m. Eastern time. The Standard & Poor’s 500 index rose 18 points, or 0.8 percent, to 2,256. The Nasdaq composite added 49 points, or 0.9 percent, to 5,432. The Russell 2000 index, which tracks small-company stocks, jumped 10 points, or 0.7 percent, to 1,367. The Russell rose almost 20 percent last year and did far better than indexes focused on larger companies. U.S. stocks are coming off a three-day losing streak.

OIL: Benchmark U.S. crude gained 90 cents, or 1.7 percent, to $54.62 a barrel in New York. Brent crude, used to price international oils, rose 95 cents, or 1.7 percent, to $57.77 a barrel in London. That sent energy companies higher. Marathon Petroleum surged $3.53, or 7 percent, to $53.88 and Halliburton added $1.93, or 3.6 percent, to $56.02.

Natural gas companies dropped as natural gas futures dropped 7.8 percent. Southwestern Energy lost 62 cents, or 5.7 percent, to $10.20 and Cabot Oil & Gas gave up 97 cents, or 4.2 percent, to $22.39.

BONDS: Bond prices fell. The yield on the 10-year Treasury note rose to 2.49 percent from 2.43 percent late Friday. Higher bond yields are linked to higher interest rates, and bank stocks made big gains. Citigroup rose $1.47, or 2.5 percent, to $60.90 and Morgan Stanley picked up $1.12, or 2.7 percent, to $43.37. Banks and energy companies both climbed more than 20 percent last year.

Utility companies fell, and real estate investment trusts and companies that make and sell household goods made far smaller gains than the rest of the market. Those stocks are often compared to bonds because they pay large dividends, but the jump in yields Tuesday encouraged investors to look elsewhere.

COPY THAT: Xerox surged 85 cents, or 14.8 percent, to $6.60 after it split itself in two, a move the company announced almost a year ago. The original Xerox kept its printer and copier business. The second company will focus on business process outsourcing, providing payment processing and other services. Xerox will receive $1.8 billion in cash.

The new company, Conduent Inc., now trades under the ticker symbol “CNDT.” That stock lost 72 cents, or 4.8 percent, to $14.18 in early trading.

MANUFACTURING ACTION: The manufacturing sector continued its recovery and ended 2016 on a strong note. The Institute for Supply Management said its manufacturing index rose to 54.7 in December, its highest reading of the year. That was the fourth straight month of expansion and the ninth out of the last 10. The result was a bit stronger than analysts expected.

MISSING 2016: Graphics processor maker Nvidia couldn’t break out of a recent slump. The stock more than tripled in value last year, but hit a wall in the final days of trading. The stock slid $2.47, or 2.3 percent, to $104.27. It’s down 11 percent since Dec. 27.

DOUBLE CLICKED: Technology stocks also traded higher. Facebook added $2.39, or 2.1 percent, to $117.44 and Alphabet, Google’s parent company, rose $16.20, or 2 percent, to $808.65. On Monday Alphabet announced a partnership with Fiat Chrysler. The companies will work together on a connected car system. Fiat Chrysler stock picked up 49 cents, or 5.3 percent, to $9.61.

CURRENCIES: The dollar jumped to 118.36 yen from 116.78 yen. The euro slumped to $1.0366 from $1.0531.

OVERSEAS: The FTSE 100 index in Britain rose 0.7 percent to another all-time high. The French CAC 40 added 0.5 percent. Germany’s DAX inched up 0.1 percent. Hong Kong’s Hang Seng index gained 0.7 percent and the Kospi in South Korea rose 0.9 percent. Tokyo’s stock market remained closed for the New Year’s holiday.