May 5, 2016 / 5:01 PM / 2 years ago

US STOCKS-US stocks edge up as rise in oil drives energy shares

* Weekly jobless claims rise more than expected

* Tesla reverses premarket gains, falls 4.5 pct

* Alibaba rises after reporting results

* Kraft Heinz jumps to record high after profit tops est.

* Indexes up: Dow 0.22 pct, S&P 0.16 pct, Nasdaq 0.16 pct (Updates to early afternoon)

By Tanya Agrawal

May 5 (Reuters) - Wall Street trimmed early gains but remained higher in afternoon trading on Thursday as a rise in oil prices boosted energy shares, and investors awaited U.S. jobs data on Friday.

Oil prices jumped about 3 percent as a huge wildfire in Canada’s oil sands region and escalating tensions in Libya stoked concerns among investors of a near-term shortage in supply.

Investors are also keeping a keen eye on the jobs data for April as any signs of a strengthening labor market could influence the pace of future rate hikes.

Nonfarm payrolls likely rose by 202,000 last month, after rising 215,000 in March, while the unemployment rate is forecast to hold at 5 percent.

Global headwinds that have partly prevented the U.S. central bank from raising rates again may have dissipated, St. Louis Federal Reserve President James Bullard said on Thursday.

Still, traders are pricing in only one increase later this year.

An accommodative Federal Reserve and a recovery in oil prices have helped U.S. stocks rebound from sharp losses at the start of the year.

However, the rally lost momentum in the past two weeks, weighed down by underwhelming quarterly earnings and mixed economic data.

“Investors are in a wait-and-see mode till we get some direction from the jobs report,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.

“Equities appear to be in need of further proof that the economy and earnings will improve in the second half of the year, and I expect the market to trend generally sideways till mid-year.”

At 12:38 p.m. ET (1638 GMT) the Dow Jones industrial average was up 38.49 points, or 0.22 percent, at 17,689.75, the S&P 500 was up 3.25 points, or 0.16 percent, at 2,054.37 and the Nasdaq Composite was up 7.65 points, or 0.16 percent, at 4,733.29.

Seven of the 10 major S&P sectors were higher, with the energy index’s 0.7 percent rise leading the gainers.

Data on Thursday showed the number of Americans filing for unemployment benefits rose more than expected last week, posting the biggest jump in more than a year, but the underlying trend continued to point to a strengthening labor market.

Tesla reversed premarket gains to trade down 3.5 percent after analysts expressed doubts about the electric carmaker’s ability to deliver vehicles ahead of schedule.

Fitbit fell 16.6 percent to $14.25 after the wearable fitness device maker’s profit forecast for the current quarter fell far short of analysts’ estimates.

Alibaba was up 4.1 percent at $78.92 as China’s biggest e-commerce company said fourth-quarter revenue rose 39 percent.

Kraft Heinz jumped as much as 5.2 percent to a record high of $84.17 after its quarterly profit smashed analysts’ estimates.

Advancing issues outnumbered decliners on the NYSE by 1,535 to 1,345. On the Nasdaq, 1,437 issues fell and 1,254 advanced.

The S&P 500 index showed 19 new 52-week highs and four new lows, while the Nasdaq recorded 28 new highs and 43 new lows. (Reporting by Tanya Agrawal; Editing by Anil D’Silva)

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