NEW YORK — Energy stocks led a steady market rally Friday, spurred by a rally in oil prices over $85 a barrel and an upbeat outlook from Schlumberger.
The Dow Jones industrial average rallied steady from just before midday through the close, ending with a gain of 69.99 points, or 0.6 percent, at 11,204.28, boosted by a 1.8 percent gain in Chevron. Merck was up 5 percent after calming investors’ anxiety about the effect of the U.S. health care overhaul on its profits, and American Express moved higher by 2.7 percent after a strong earnings report late Thursday.
Investors grew more optimistic about the U.S. economy following a Commerce Department report showing that sales of new homes in the U.S. posted their largest year-over-year increase in nearly five years.
Commodity traders bet on an improving outlook for oil demand, pushing crude futures up $1.42 to settle at $85.12 a barrel in New York. Long-dated contracts suggested even stronger prices later in the year, including a move above $90 by December.
“The commercial side of the market is getting involved,” GA Global Markets broker Tony Rosado said. “They haven’t seen conditions as positive as these in nearly two years.”
Schlumberger was up 6.6 percent after it announced a 28 percent decline in first-quarter earnings but forecast a full-year turnaround.
Smith International, which is due to be acquired by Schlumberger in a deal pending regulatory approval, was up 7.1 percent.
Worries about Greece’s finances kept a lid on the market’s gains but didn’t derail the generally optimistic mood that pervaded the market all week. Traders remained focused on the first-quarter earnings season on Wall Street, which has provided far more pleasant surprises than bad.
“I think the tone of the markets, moving just a little higher day by day since the start of the earnings season, is a good thing,” said Brian Belski, chief strategist at Oppenheimer Asset Management.
