Market Wrap: Energy Stocks Lead an Advance on Wall Street

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Financial Markets Wall Street
Richard Drew/AP

By MATTHEW CRAFT

NEW YORK — Energy and health care companies led major stock indexes higher Tuesday, even as crude oil resumed its slide. General Motors (GM) rose after reporting stronger sales, and Biogen (BIIB), a biotech company, soared following news that its drug for Alzheimer’s disease showed promise.

Reports that fewer people turned out to shop over the Thanksgiving weekend helped knock the market down on Monday. But those concerns were likely overblown, as other evidence suggests that people simply wanted to avoid the crowds at Black Friday sales, said Brad McMillan, the chief investment officer at Commonwealth Financial. IBM Digital Analytics, for instance, said that sales on Cyber Monday jumped 8 percent.

“I think what you’re seeing is a little reality settling in,” McMillan said. “Look at Cyber Monday numbers. You see that and say hmm, maybe it’s not going to be so bad after all.”

The Standard Poor’s 500 index (^GPSC) rose 13.11 points, or 0.6 percent, to 2,066.55.

The Dow Jones industrial average (^DJI) gained 102.75 points, or 0.6 percent, to 17,879.55, while the Nasdaq composite (^IXIC) rose 28.46 points, or 0.6 percent, to 4,755.81. Oil and gas companies led nine of the 10 industries in the SP 500 higher.

The one economic report out Tuesday gave investors some encouragement. Newly built houses and schools lifted U.S. construction spending in October to the highest level since May, the Commerce Department said. Overall construction spending climbed 1.1 percent, higher than economists’ forecasts.

General Motors posted solid sales gains in the U.S. last month, helped by discounts and falling gas prices. GM’s sales climbed 6 percent to nearly 226,000 in November. The carmaker’s stock gained 32 cents, or 1 percent, to $33.26.

Among other companies making big moves, Avanir Pharmaceuticals (AVNR) soared on news that Otsuka Pharmaceuticals of Japan plans to buy the company for $3.5 billion. Under the terms of the deal, Otsuka would pay Avanir investors $17 a share in cash. Avanir’s stock jumped $1.92, or 13 percent, to $16.92.

Crude oil prices resumed their long slide, falling $2.12 to settle at $66.88 a barrel in New York trading. The slump has rippled throughout financial markets in recent weeks, putting stress on oil-exporting countries such as Russia. On Tuesday, Russia’s government forecast that the country’s economy will shrink next year. That helped send Russia’s currency down 5 percent against the dollar and drive its RTS stock index down 3 percent.

The economic conditions Russia is facing right now are aggressively against its economy.


“The economic conditions Russia is facing right now are aggressively against its economy,” said Jameel Ahmad, Chief Market Analyst for FXTM.

Elsewhere in Europe, Germany’s DAX slipped 0.3 percent, while France’s CAC 40 inched up 0.3 percent. In the U.K., the FTSE 100 index of leading British shares gained 1.3 percent.

In Asia, Japan’s Nikkei rose 0.4 percent. In China, the Shanghai Composite Index climbed 3 percent, and Hong Kong’s Hang Seng added 1.2 percent.

Traders will have a batch of economic news to digest over the rest of the week. On Thursday, the European Central Bank meets to discuss whether the region’s flagging economy needs more support. On Friday, the U.S. Labor Department releases its look at employment in November, a report that often sends markets swinging.

In other trading Tuesday, government bond prices fell, pushing the yield on the 10-year Treasury note up to 2.29 percent.

Prices for precious metals sank. Gold dropped $18.70 to settle at $1,199.40 an ounce, while silver slid 24 cents to $16.46 an ounce. Copper slipped a penny to $2.89 a pound.

In other trading on the New York Mercantile Exchange:

  • Wholesale gasoline fell 7 cents to close at $1.812 a gallon.
  • Heating oil fell 6 cents to close at $2.154 a gallon.
  • Natural gas fell 13 cents to close at $3.874 per 1,000 cubic feet.

What to Watch Wednesday:

  • ADP (ADP) releases its survey of private-sector hiring for November at 8:15 a.m. Eastern time.
  • The Labor Department reports business productivity and costs for the third quarter at 8:30 a.m.
  • The Institute for Supply Management releases its non-manufacturing survey for November at 10 a.m.
  • The Energy Information Administration reports weekly petroleum stockpiles at 10:30 a.m.
  • The Federal Reserve releases its Beige Book survey or regional economic conditions at 2 p.m.

These selected companies are scheduled to report quarterly financial results:

  • Abercrombie Fitch (ANF)
  • Aeropostale (ARO)
  • G-III Apparel (GIII)
  • Guess (GES)
  • New York Co. (NWY)
  • Pacific Sunwear (PSUN)
  • Tilly’s (TLYS)
  • 1. Open a 401K or IRA account

  • For 2014, you’re allowed to contribute up to $17,500 to your 401(k). (If you’re 50 and over, that limit increases to $23,000.) This is the maximum you’re able to save per year and still defer paying income tax on that money.

    Since 401(k) contributions must be made through payroll deductions, talk to your company’s payroll department about adjusting your December contribution or adding a lump-sum amount from your holiday bonus when you receive it. Also, chat with your human resource department to see if it will let you retroactively earmark contributions made prior to April 15, 2015 for the 2014 tax year.

    2. Max out your 401(k) contributions

  • 3. Take your required minimum distributions

  • 4. Contribute to a 529 plan

  • 5. Think about a Roth IRA conversion

  • 6. Consider tax loss harvesting

  • Do you have a flexible spending account, or FSA, at work? Check the detail of your company’s policy; many are “use it or lose it,” meaning if you don’t use the full amount in your FSA by year’s end, that money will not roll over.

    New federal laws permit employers to let their workers roll over a maximum of $500, but it’s the employers choice whether or not to allow this rollover. Also, some employers give their workers a grace period until March of the following year to use the prior year funds, while other employers require that the funds are used by Dec 31. Check with your HR department to learn your employers’ rules.

    Remember that FSA funds can be used for a lot more than just prescriptions and co-pays. If you have money you need to spend before it’s gone, you may also be able to use it for things like dental work, glasses or contact lenses, and even some qualified over-the-counter medicine and supplies.

    7. Use your FSA funds

  • Secure some additional tax deductions for 2014 by donating to a charitable cause. As long as you itemize your donations, you can claim everything from cash donations to goods to used vehicle donations. You can even give some of your stock to charity, thus avoiding capital gains tax.

    Just be sure to get a signed and dated receipt from the charity, noting the amount of your contribution — especially if you’re donating goods instead of cash. As an added precaution, take photographs of any high-value donations (over $250).

    8. Donate to charity

  • 9. Make your home more energy-efficient

  • 10. Sign up for health insurance

  • You can give up to $14,000 to individuals per year without needing to file a gift tax return. If you’re married, you and your spouse can each bequeath gifts of $14,000 to an individual without triggering a taxable event. If you decide to give a major financial gift to your children, talk to your kids first about strong money-management skills. Here’s a free guide to help to talk to your kids about money.

    Giving a little bit each year can also help reduce your overall estate tax burden (although the estate tax exemption is $5.34 million in 2014, which means few taxpayers will need to worry about this).

    11. Gift your wealth

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