U.S. stock indexes are slightly higher Tuesday morning as energy companies continue to rise with oil prices. Stock indexes took small losses the past two days. Facebook is slumping after the co-founders of Instagram announced that they are resigning from the photo sharing company. Interest rates continue to rise as investors expect the Federal Reserve to raise its benchmark rate on Wednesday.
KEEPING SCORE: The S&P 500 index picked up 1 point to 2,920 as of 10:15 a.m. Eastern time. The Dow Jones Industrial Average rose 40 points, or 0.2 percent, to 26,602. The Nasdaq composite slid 1 point to 7,991. The Russell 2000 index of smaller-company stocks gained 2 points, or 0.1 percent, to 1,707.
OIL BOOST: Oil prices continued to rise after a weekend meeting of OPEC and its allies ended without an increase in oil production. OPEC nations, Russia and others concluded the balance between supply and demand is “healthy.” Oil prices have also climbed recently because Iran is exporting less oil after the U.S. withdrew from the international nuclear deal with Iran and put more sanctions on the country.
Benchmark U.S. crude rose 0.7 percent to $72.55 a barrel in New York. It’s at its highest price in about three months after it peaked at more than $74 a barrel in July. Brent crude, the standard for international oil prices, rose 0.8 percent to $81.17 a barrel in London. Brent crude is at its highest price since late 2014.
ConocoPhillips rose 1.7 percent to $78.36 and Philips 66 added 1.4 percent to $115.07.
UNFRIENDED: Facebook fell 2.4 percent to $161.46 after the co-founders of Instagram said they’re resigning. Instagram CEO Kevin Systrom said Monday that he and Mike Krieger, Instagram’s chief technical officer, plan to leave the photo sharing app in the next few weeks. He gave no explanation. Facebook bought Instagram for $1 billion in 2012 and it’s been a bright spot for company. It’s seen as a more uplifting place than Facebook itself and is popular with teens and young people, a group Facebook has had trouble keeping around.
CenturyLink sank 8.2 percent to $21.01 after its chief financial officer, Sunit Patel, left the company to take a job at T-Mobile. T-Mobile USA is trying to combine with rival Sprint, and it said Patel will be in charge of mergers and integration for the company staring on Oct. 1.
T-Mobile dipped 0.2 percent to $68.78.
BONDS: Bond prices kept falling. The yield on the 10-year Treasury note rose to 3.10 percent from 3.07 percent. The Federal Reserve is meeting Tuesday and it’s almost certain the central bank will raise interest rates on Wednesday. That would be the third increase this year and would take the benchmark rate to a range of 2 percent to 2.25 percent, with another boost expected this year and more to come in 2019.
The Fed has raised rates a total of eight times since late 2015. Before that, rates stayed at a record low for seven years beginning in 2008 at the height of the financial crisis.
Stocks usually do well when the Fed starts to raise interest rates because the higher rates reflect solid economic growth, which is linked to strong company profits. But that changes as rates go higher and they have a more dramatic effect in slowing economic growth, a step the Fed takes to fight inflation.
MORE DEALS: Drive-in restaurant chain Sonic jumped 19 percent to $43.56 after it agreed to be bought by Inspire Brands, which also owns Arby’s and Buffalo Wild Wings. The purchase values Sonic at $43.50 a share, or $1.57 billion. Inspire Brands is controlled by the private equity firm Roark Capital. It was known as Arby’s until it bought Buffalo Wild Wings in February and adopted a new name.
Michael Kors said it will pay more than $2 billion for Italian fashion house Gianni Versace in a deal that was widely expected after recent media reports. Kors and its competitors have been buying luxury brands to add more glamour to their businesses. Kors bought the Jimmy Choo shoe brand for $1.35 billion a little more than a year ago. Kors stock edged up 0.4 percent to $67 after it dropped 8.2 percent Monday.
Companies around the world have announced $3.26 trillion in deals this year, according to Dealogic, far above the $2.49 billion in deals that were struck over the first three quarters of 2017.
CURRENCIES: The dollar rose to 112.86 yen from 112.73 yen. The euro rose to $1.1790 from $1.1758.
OVERSEAS: The British FTSE 100 index rose 0.6 percent. France’s CAC 40 gained 0.2 percent, and the DAX in Germany also rose 0.2 percent.
Tokyo’s Nikkei 225 gained 0.3 percent and the Sensex in India slipped 0.1 percent. Markets in Hong Kong and Seoul were closed for holidays.
Source: The Associated Press