Rising oil prices helped push the US stock market mostly higher, but the gains were tiny as investors weighed mixed results from companies reporting earnings.
Stocks fell shortly after the open yesterday, then headed mostly higher along with the price of oil. Chevron led the Dow Jones industrial average higher with a 2.2% gain.
A jump in JPMorgan Chase after the bank reported strong first-quarter earnings also helped push the blue-chip index higher. Wells Fargo slumped after reporting that its earnings had fallen.
The Dow Jones rose 59.66 points, or 0.3%, to 18,036.70. The Standard & Poor’s 500 climbed 3.41 points, or 0.2%, to 2,095.84. The Nasdaq composite fell 10.96 points, or 0.2%, to 4,977.29.
Stocks have generally been rising this year, but the gains have been modest as several factors from labour strife at West Coast ports, bad weather, a slump in oil prices and a strengthening dollar have dug into earnings.
A stronger currency makes profits earned overseas by US multinationals worth less when translated back to dollars.
Companies in the S&P 500 are expected to report a 3.5% slump in earnings per share in the first quarter, according to S&P Capital IQ.
That would be the first quarterly drop since the US was climbing out of recession in 2009.
Many financial analysts and stock strategists are shrugging off the profit hit as temporary. But not everyone is convinced, said LPL Financial economist John Canally, and worry is beginning to creep in.
“What will be the further impact of the strong dollar? If you’re an energy company, what do you do if oil prices don’t rise? There are no answers yet,” he said.
“And that uncertainly is what markets don’t like and so trading is choppy.”
The impact of stronger dollar was seen in Johnson & Johnson’s results released yesterday.
The company said a stronger dollar was partly to blame for an 8.6% drop in its first-quarter profit. The company also cut its full-year profit forecast. Shares fell three cents to 100.52 dollars.
Investors will have more results to mull over in the coming days. Bank of America, Delta Air Lines and Netflix report today, giant money manager BlackRock and Goldman Sachs tomorrow and General Electric and IBM on Friday.
In total, 35 members of the S&P 500 are expected to report this week.
In economic news, the US commerce department reported that retail sales rose 0.9% last month, after declining 0.5% in February.
The rebound suggests that shoppers are returning after an unseasonably cold winter froze sales.
But the rise was less than economists had expected, and it follows other indicators that US economic growth is slowing.
A jobs report released earlier this month showed that hiring had slowed dramatically in the March.
“It’s remarkable that we’ve had relatively weak economic data but the market has held up,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
The rise in oil yesterday came on indications that US oil production in places like North Dakota is beginning to slip as a result of a sharp pull-back in drilling activity in recent months.
Benchmark US crude rose 1.38 dollars to close at 53.29 dollars a barrel in New York. Brent crude, a benchmark for international oils used by many US refineries, rose 50 cents to close at 58.43 dollars in London.
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