Wall Street turned higher again in a volatile session on Wednesday, after the U.S. oil benchmark rallied eight percent on the sliding U.S. dollar.
At 2:47 p.m. in New York, the Dow Jones Industrial Average was up 1.2% at 16,344. The S&P 500 rose 0.5% to 1,912, while the NASDAQ 100 pared losses to 4,182, down 0.2%.
Oil prices surged on Wednesday as traders brushed aside all-time high U.S. crude inventories and focused on the plunging U.S. dollar.
West Texas Intermediate for March delivery rose eight percent to settle at $32.22 a barrel on the New York Mercantile Exchange. The U.S. Energy Information Administration reported on Wednesday that crude inventories rose by 7.8 million barrels to above 500 million barrels for the week ended January 29—a weekly record-high.
The U.S. dollar on Wednesday was on track for its largest one-day slide compared to the euro since early December on the heels of a disappointing reading on U.S. service-sector activity.
Data from the Institute for Supply Management (ISM) showed that companies in the U.S. service sector, such as retail, banking, and health care, expanded in January at the slowest pace in almost two years. The ISM said its non-manufacturing index fell from 55.8% in December to 53.5%, missing economists’ expectations of a 55.2% reading.
A separate report earlier in the day showed private-sector employment gains increased in January but at a slower pace than in the prior month. Automatic Data Processing Inc. said employers added 205,000 jobs in January, compared to December’s gain of 267,000.
The data comes ahead of the more comprehensive employment report by the U.S. government on Friday.
European equities ended lower for a third day in a row. The Stoxx Europe 600 Index shed 1.5%.
Gold futures settled at their highest level in 15 weeks. Bullion for April delivery rose 1.3% to end at $1,141.30 per ounce, the highest since October 30, on Comex.
Yahoo! Inc. (NASDAQ:YHOO) fell 8.6% to $26.57, hitting its lowest intraday price since mid-2013. The Web company said it is laying off about 1,700 employees and mulling “strategic alternatives.”
Chipotle Mexican Grill, Inc. (NYSE:CMG) tumbled more than seven percent. The embattled burrito restaurant chain marked its worst quarter as a publicly traded company on Tuesday when it posted a 44% drop in its fourth-quarter profit. An E. coli outbreak and other health safety issues have driven customers away.
Comcast Corporation (NASDAQ:CMCSA) rose 4.6% to $57.09. The largest U.S. cable provider reported better-than-expected quarterly revenue, helped by growth in its media and entertainment unit NBC Universal.
Merck & Co., Inc. (NYSE:MRK) fell 3.4% to $48.64 after the strong dollar and increasing competition spurred the drug maker to report an 87% drop in fourth-quarter profits and lower sales.
General Motors Company (NYSE:GM) stumbled more than four percent to $28.18, erasing an earlier gain even as the largest U.S. automaker reported quarterly earnings and revenue that beat analysts’ expectations.
Lowe’s Companies, Inc. (NYSE:LOW) sank nine percent to $65.32 after the U.S. home improvement chain agreed to buy Canadian rival RONA Inc. (TSE:RON) in a friendly takeover valued at CA$3.2 billion. Rona shares, meanwhile, almost doubled to a nine-year high of CA$23.37 in Toronto trading.
Gilead Sciences, Inc. (NASDAQ:GILD) rose 2.9% to $85.10. The Foster City, California-based drug maker said its two hepatitis drugs, “Sovaldi” and “Harvoni,” generated combined sales of $4.89 billion worldwide during the fourth quarter, beating analysts’ projections for global sales of $4.45 billion.
3M Co (NYSE:MMM) gained two percent to $150.79 after the maker of “Post-it Notes” raised its quarterly dividend by eight percent to $1.11 per share and also set up a $10.0-billion share buyback plan.
Wednesday saw the first day of trading of the first two initial public offerings (IPOs) of 2016. ADRs of Beigene Ltd (ADR) (NASDAQ:BGNE), a developer of immuno-oncology drugs for cancer treatments, surged 19% to $28.62 per share. The second IPO, Editas Medicine Inc (NASDAQ:EDIT), a genome editing company, increased 14% to $18.24 per share.
Among companies reporting after the closing bell today (Wednesday) is GoPro Inc (NYSE:MMM). The action camera company is forecast to deliver steep declines in earnings and sales for the 2015 holiday season.