Stocks post modest rise as oil price climbs

Financial and energy companies led a modest increase in U.S. stocks Wednesday, giving the stock market its third gain in a row.

The market got a boost from a pickup in the price of oil, which climbed about 4% after an early slide. Rises in oil prices tend to favor battered energy stocks and financial companies such as banks, which have been in the doldrums due to investor concerns that loans to struggling oil companies could go bad.

After several weeks of moving in different directions, the stock market appears to be getting more closely tied to the fluctuations in oil prices.

“Oil is what’s been driving the market lately,” said Chris Gaffney, president of EverBank World Markets.

Utilities and consumer staples stocks were among the biggest decliners.

The Dow Jones industrial average rose 42.67 points, or 0.2%, to 18,096.27. The Standard & Poor’s 500 index edged up 1.60 points, or 0.1%, to 2,102.40. The Nasdaq composite index advanced 7.80 points, or 0.2%, to 4,948.13.

The Dow is now up almost 4% for the year, while the S&P 500 is up about 3%. The Nasdaq narrowed its loss to 1.2%.

Trading got off to a flat start, with the major stock indexes moving sideways. They perked up by midmorning as oil prices turned higher, but the rally lost some steam by the end of the day.

U.S. crude rose $1.55, or 3.8%, to $42.63 a barrel in New York. Brent crude, the international benchmark, climbed $1.77, or 4%, to $45.80 a barrel in London. Heating oil jumped 5.5%; it rose 7 cents to $1.33 a gallon.

That helped lift shares in several energy companies. Chesapeake Energy jumped 4.9% to $6.42 and Williams Cos. rose 4.6% to $18.83.

The market got some encouraging data on housing, with the National Assn. of Realtors reporting that sales of previously occupied U.S. homes bounced back in March after a February slump as the spring home-selling season kicked off.

Investors also had their eye on the latest batch of company earnings.

Corporate profits for companies in the S&P 500 are expected to be down 8.1%, according to S&P Global Market Intelligence. Even excluding energy companies, which have been hammered by falling oil prices, earnings growth for the S&P 500 companies is projected to be down 3.3%.

Only about 15% of companies have reported results at this point, but many have turned in better-than-expected results.

“So far, we’re actually seeing companies surprising to the upside,” said Jason Pride, director of investment strategy at Glenmede.

Discover Financial Services led all the gainers in the S&P 500 after the credit card issuer and lender reported better-than-anticipated quarterly profit and sales as loan volume improved. The stock leaped 8.2% to $56.84.

Palo Alto cloud-computing firm VMWare also delivered strong results, which vaulted its shares nearly 14% to $58.53.

Other companies didn’t do so well.

Coca-Cola slid 4.8% to $44.37 after the world’s biggest beverage maker reported a lower profit for the first quarter. The company was squeezed by a strong dollar and charges related to the transformation of its North American operations. Coca-Cola was the biggest decliner in the S&P 500.

Beyond earnings, investors welcomed news that printer maker Lexmark International agreed to be bought by a group that includes Apex Technology and PAG Asia Capital for about $2.51 billion. The stock climbed 9.3% to $37.90.

Stock markets in Europe also closed higher.

Germany’s DAX rose 0.7%, and France’s CAC-40 gained 0.6%. The FTSE 100 of leading British shares edged up 0.1%. Earlier in Asia, most markets closed lower. South Korea’s Kospi fell 0.3% and Hong Kong’s Hang Seng slid 0.9%. Japan’s benchmark Nikkei 225 edged up 0.2%. Australia’s S&P/ASX 200 climbed 0.5%.

In other energy trading, wholesale gasoline rose about 3 cents, or 1.8%, to close at $1.51 a gallon. Natural gas fell 2 cents to close at $2.069 per 1,000 cubic feet.

Precious and industrial metals futures inched higher. Gold rose 10 cents to $1,254.40 an ounce, silver rose 16 cents, or 1%, to $17.14 an ounce and copper rose 1.5 cents to $2.24 a pound.

Bond prices fell. The yield on the 10-year Treasury note rose to 1.85 from 1.78 late Tuesday. In currency markets, the euro fell to $1.1302 from $1.1377, and the dollar rose to 109.80 yen from 109.13.