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Stocks rise following Wednesday's big slump

Posted at 5:11 PM, Jan 21, 2016

NEW YORK (AP) — Stocks rose Thursday and recovered some of their steep losses from the day before. The price of oil also recovered from a big decline. That lifted energy companies, which have been struggling as energy prices tumble.

European markets also rose on hopes the European Central Bank will do more to aid the region's economy.

In the U.S., energy stocks climbed as oil prices bounced back from their worst day in four months, and strong earnings from Verizon lifted telecom stocks. Blue chip stocks did better than the rest of the market. The Dow Jones industrial average had its second-best day of 2016.

The Dow added 115.94 points, or 0.7 percent, to 15,882.68. The Standard & Poor's 500 index rose 9.66 points, or 0.5 percent, to 1,868.99. The Nasdaq composite index added less than half a point and closed at 4,472.06.

Stocks were on pace for much larger gains earlier in the day. The Dow was up 272 points shortly after noon, which would have canceled out Wednesday's loss.

U.S. crude rose $1.18, or 4.2 percent, to close at $29.53 a barrel in New York. On Wednesday U.S. crude took its biggest one-day loss since September. Brent crude, a benchmark for international oils, rose $1.37, or 4.9 percent, to $29.25 a barrel in London.



Energy stocks have crumbled as the price of oil fell from $100 a barrel in mid-2014. The price of oil is the lowest it's been since 2003.

Natural gas company Southwestern Energy jumped after saying it will eliminate around 1,100 jobs, or 44 percent of its work force, in the next few months. Its shares added $1.42, or 19.2 percent, to $8.80. Coal and natural gas company Consol Energy surged 97 cents, or 19.1 percent, to $6.04. Pipeline company Kinder Morgan rose $1.87, or 15.6 percent, to $13.88.

Consol and Southwestern were the second- and third-worst performing S&P 500 stocks in 2015.

European Central Bank head Mario Draghi said the ECB will consider using more stimulus measures at its next meeting in March as it tries to bolster the European economy. The prospect of more stimulus sent the euro down to $1.0875 from $1.0894 late Wednesday.

The ECB has been buying government-backed bonds as part of its efforts to stimulate the region's economy. Yields on 10-year bonds issued by European countries dropped following Draghi's remarks. That suggests investors expect government bond prices to rise further.



European stock indexes also rose. Britain's FTSE 100 increased 1.8 percent, Germany's DAX climbed 1.9 percent and France's CAC gained 2 percent.

David Lefkowitz, senior equity strategist at UBS Wealth Management, said the ECB is responding to the current turmoil in the markets while the Fed wants to keep raising interest rates and Chinese economic policy seems to be in disarray.

Lefkowitz thinks the market could get another lift next week if the Fed acknowledges the turbulent state of the markets at its January meeting. The Fed raised interest rates for the first time in almost a decade in December, and Lefkowitz said investors are hoping for signs the Fed plans to go slowly.

"At least one of the major central banks is willing to be ... more pragmatic and recognize that when facts change, you may need to revisit your policies," he said.

Telecom stocks rose after Verizon, the largest U.S. cellphone carrier, said it turned a profit in the fourth quarter and held on to more customers. Its shares gained $1.45, or 3.3 percent, to $45.87. AT&T shares added 64 cents, or 1.9 percent, to $34.54.

Consumer stocks also gained ground. Wal-Mart rose $1.04, or 1.7 percent, to $61.88. It's the only Dow component that has risen this year, though it's up only 1 percent. Department store operator Nordstrom picked up $1.64, or 3.6 percent, to $47.74 and Home Depot gained $3.76, or 3.2 percent, to $120.22.



Union Pacific's fourth-quarter profit and revenue fell far short of Wall Street estimates. CEO Lance Fritz said the uncertainty in energy and commodity markets and the strong U.S. dollar will continue to affect the railroad's business this year. The stock lost $2.61, or 3.5 percent, to $71.

Tokyo's Nikkei 225 lost 2.4 percent, Hong Kong's Hang Seng fell 1.8 percent and China's Shanghai Composite sank 3.2 percent.

The price of heating oil climbed 3.2 cents, or 3.7 percent, to 89.8 cents gallon as a winter storm bore down on the East Coast. Wholesale gasoline rose 1.4 cents to $1.031 a gallon. Natural gas picked up 2 cents to $2.138 per 1,000 cubic feet.

The price of gold fell $8 to $1,098.20 an ounce and silver declined 6.6 cents to $14.094 an ounce. Copper rose 3.7 cents, or 1.9 percent, to $1.997 a pound.

The dollar rose to 117.50 yen from 116.78 yen. The yield on the 10-year Treasury note rose to 2.03 percent from 1.98 percent.