Off The Wire
Wall Street climbs with oil, but Facebook's slide checks gains
(Reuters) - U.S. stocks rose on Tuesday, with energy stocks leading the way on a jump in oil prices, but another drop in Facebook’s shares kept the gains on the Nasdaq Composite and the S&P in check.
Shares of Facebook (FB.O) fell 4.7 percent after Bloomberg reported the U.S. Federal Trade Commission is investigating the social network company over its use of personal data.
The stock sank almost 7 percent on Monday, sparking a market-wide sell-off, after a whistleblower said a political consultancy hired by Donald Trump improperly accessed information on 50 million Facebook users to sway public opinion.
The S&P 500 technology index .SPLRCT, after a fleeting advance at the open, were back in the red, adding to losses on Monday as Facebook’s data privacy issues hit the sector on fears of increased regulation over how companies use data.
“Not all the overhang has cleared, there’s still some anxiety. But as a whole, we still think the space has a lot of upside and we are still constructive on tech,” said Josh Navarro, global investment specialist at J.P. Morgan Private Bank in New York.
Oil prices rose more 2 percent to their highest level so far this month, lifted by tension in the Middle East and the possibility of further falls in Venezuelan output. [O/R]
The gains lifted the S&P energy index .SPNY by 1.25 percent, easily the biggest gain among the 11 major S&P sectors.
At 11:04 a.m. ET, the Dow Jones Industrial Average .DJI was up 0.58 percent at 24,754.76. The S&P 500 .SPX rose 0.21 percent to 2,718.55 and the Nasdaq Composite .IXIC gained 0.28 percent to 7,364.99.
Still, declining issues outnumbered advancers on the NYSE for a 1.07-to-1 ratio, and for a 1.09-to-1 ratio on the Nasdaq.
Investors are also focused on the Federal Reserve’s two-day meeting where the central bank is expected to raise interest rates by a quarter percentage point. But the bigger question is how aggressive the Fed will be with monetary policy after that.
Traders currently expect two more rate hikes later this year, although they said policymakers could set a hawkish tone by forecasting four increases in their “dot plot” projections.
“There has been a little bit of concern from the marketplace that the Fed has become slightly more hawkish and the markets digesting where are fund rates going,” said Navarro.
The past nine years of U.S. stock market gains have come with the Fed fostering an environment of easy money for the financial system, but it has begun gradually withdrawing that accommodation as the economy appears to be on healthier footing.
Aside from the Fed, the Trump administration is creating a stir with plans for up to $60 billion in new tariffs on Chinese imports by Friday, targeting technology, telecommunications and intellectual property, sources familiar with the matter told Reuters.
Among stocks, Oracle (ORCL.N) dropped 8.9 percent after the business software maker reported quarterly revenue that missed Wall Street estimates.
Reporting by Sruthi Shankar in Bengaluru; Editing by Savio D'Souza and Dan Burns