U.S. Stocks Rise, Fueled by Energy Shares

By Akane Otani and Mike Bird Features Dow Jones Newswires

Rallying energy shares pushed U.S. stock indexes toward fresh highs Monday.

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A recovery in commodity prices, pickup in growth across economies around the world and a weaker dollar have helped major indexes climb this year, investors and analysts say.

The S&P 500, Dow Jones Industrial Average and Nasdaq Composite posted records together Friday and were on track to repeat the feat Monday.

"The question is whether valuations are already reflecting all of the good news -- whether it's economic growth or tax reform -- and then trying to determine where that leaves us with stocks," said Dan Miller, director of equities at GW&K Investment Management.

The Dow industrials rose 32 points, or 0.1%, to 23571. The S&P 500 added 0.2%, and the Nasdaq Composite was up 0.4%.

Energy shares in the S&P 500 jumped and are on track for their biggest one-day gain since July as oil prices rallied.

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Chesapeake Energy climbed 9.5%, while Apache rose 6.7%. U.S. crude for December delivery added 3.1% to $57.35 a barrel -- its highest settlement since June 2015 -- with several analysts attributing the move to a wave of arrests in Saudi Arabia that raised concerns of a possible disruption to oil flows.

Meanwhile, corporate news drove swings in other sectors.

Qualcomm shares rose 1.9% after Broadcom launched a takeover bid for the chip maker in a deal valued at $100 billion. Broadcom shares edged up 0.4%.

Sprint shed 11% and T-Mobile fell 6.1% after the two companies officially called off their merger Saturday, putting an end to a deal that would have combined the No. 3 and No. 4 wireless carriers in the U.S.

Intel rose 1.3% and Advanced Micro Devices jumped 6.7% after The Wall Street Journal reported the two companies are teaming up to battle a common competitor, Nvidia. Nvidia shares edged up 0.3%.

On the political front, investors say they will be watching for signs of progress on a Republican tax bill, which was unveiled last week.

The Ways and Means Committee of the U.S. House of Representatives began the process of amending and then voting on the legislation Monday. The proposal to cut corporate tax rate could boost earnings at S&P 500 firms, analysts said, although many warn the bill could change considerably before it is passed.

"In terms of the impact on equity markets, we think it might put something like another 5% on earnings, but you'd expect interest rates to rise maybe a little bit faster," said Mike Bell, global market strategist at J.P. Morgan Asset Management.

Elsewhere, the Stoxx Europe 600 index edged up 0.1%, buoyed by gains in shares of basic resources companies.

Japan's Nikkei Stock Average moved off early gains as traders returned after a three-day weekend. The index closed up less than 0.1%.

The yen pared early sharp declines against the U.S. dollar, when Bank of Japan Gov. Haruhiko Kuroda said the central bank would be patient about easing. The yen was last up 0.2% against the dollar.

Ese Erheriene contributed to this article.

Write to Akane Otani at akane.otani@wsj.com and Mike Bird at Mike.Bird@wsj.com

(END) Dow Jones Newswires

November 06, 2017 15:38 ET (20:38 GMT)