Oil stocks roared into record territory Thursday, joining forces with a 283-point gain on the Dow amid expectations of fat second-quarter earnings.
The sector opened higher and accelerated through the day, building enough momentum to push through a late drop in crude-oil prices.
The sector opened higher and accelerated through the day, building enough momentum to push through a late drop in crude-oil prices.
Shares of Chevron Corp. (CVX : 93.30, +2.55, +2.8% ) , ConocoPhillips (COP :88.64, +3.05, +3.6% ) and Exxon Mobil Corp. (XOM : 89.62, +2.33, +2.7% ) all hit record highs during the session.
Oil stocks hit new highs despite crude drop
Exxon Mobil, one of the 30 Dow Jones Industrial (.DJI :13,861.73, +283.86, +2.1% ) ConocoPhillips (COP : 88.64, +3.05, +3.6% ) shares led percentage gainers in the oil group on a 3.6% jump to $88.64. Chevron Corp. (CVX : 93.30, +2.55, +2.8% ) added 2.8% to finish at $93.30. Both stocks hit all-time highs. companies, jumped 2.7% to close at $89.62 a share, lifting the company's market capitalization to $504.85 billion in the process.
"The market is expecting a strong second-quarter earnings ... driven by refining margins," said Brian Hicks, co-manager of the Global Resources Fund (PSPFX : 18.86, +0.39, +2.1% ) . "We're above $70 a barrel for oil, and it looks like the second half of the year will be quite tight in terms of supply for oil."
With energy as the best sector performer in the S&P 500, oil and other energy stocks are getting more fund flow from non-resource investors, he said.
The Amex Oil Index (XOI : 1,504.13, +28.37, +1.9% ) surged 1.9% to 1,504 points, its first trip above the 1,500-mark. The Amex Natural Gas Index (XNG : 517.16, +3.87, +0.8% ) rose 0.8% to 517.2 and the Philadelphia Oil Service Index ($OSX : 275.08, +4.35, +1.6% ) advanced 1.6% to 275.1, reversing downturns in the two previous sessions.
Crude for August delivery fell 6 cents to $72.50 a barrel on the New York Mercantile Exchange after trading as high as $73.80 earlier in the session. See Futures Movers.
Oil service consultant Foster Wheeler (FWLT : 120.69, +4.18, +3.6% ) rose 3.6% to 120.69 after it was added to the Nasdaq 100 Index (QQQ :49.56, +0.75, +1.5% ) .
UBS downgraded oil major Royal Dutch Shell (RDSA : 85.47, +1.25, +1.5% ) to neutral from buy, citing the 30% rise in the company's share price in sterling terms since mid-March. U.S.-traded shares of the Anglo-Dutch giant rose 1.5% to $85.47. "Although Shell retains upside, we see upside plus catalysts in other companies. Shell remains a very long-term value play," UBS said.
It raised its price target on the firm to 2,300 pence, from 2,100 pence a share to reflect a stronger outlook for Shell's operating environment.
Via: MarketWatch
by Stev Gelsi
by Stev Gelsi
