Stocks Fluctuate Between Gains and Losses Before Energy, Financials Send US Measures Higher

The US equity benchmarks swung between gains and losses on the first trading day of 2019 before finally settling just higher as a recovery in oil prices lifted energy stocks and financials climbed.

Goldman Sachs (GS) rose about 3% to lead the gainers on the Dow Jones Industrial Average as Barclays said it expects the bank to get through its recent woes, albeit with time. Exxon Mobil (XOM) rose 2.2% and Chevron (CVX) added 1.7% as West Texas Intermediate oil prices settled about 2.5% higher in Wednesday’s session.

That helped the Standard & Poor’s 500 energy group end 1.6% stronger, the best increase among the 11 sectors. On the downside, real estate fell 2.6% and health care shed 1.5% amid media reports that drugmakers started the new year with price increases in the US on more than 250 prescription drugs, according to data provided by Rx Savings Solutions. UnitedHealth (UNH) fell 2.3% in the steepest decline on the Dow.

Markets flip-flopped as 2019 got underway initially with sharp losses after the benchmarks posted their steepest declines in a decade last year. Stocks were weaker as China’s Caixin Manufacturing Purchasing Managers Index for December dropped to a reading of 49.7 from a 50.2 print in November, the first time it’s been in contraction territory since May 2017.

Eurozone manufacturing remained at its lowest level in almost three years, while in the US, manufacturing PMI hit the lowest in 15 months. The reports raised worries about slower global output. But sentiment turned around as oil prices advanced and as tech names rose, including Facebook (FB), which gained 3.5% and Amazon (AMZN), up 2.5%.

In company news, MyoKardia (MYOK) sank 14% after saying Sanofi (SNY) won’t extend a collaboration deal. Sanofi’s shares were down 1.7%. Bausch Health (BHC) jumped 9.6% after Piper Jaffray raised its rating on the stock to overweight from neutral, with a $27 price target.

Arconic (ARNC) surged 9.9% after Bloomberg reported that Apollo Global Management (APO), controlled by billionaire Leon Black, is in talks to buy the aluminium parts maker for about $22 a share. Apollo rose 1.1%.

By the close, the Nasdaq was up 0.5% while the Dow and the S&P 500 were each about 0.1% higher.