Market jumps as oil price rebound boosts energy stocks

FILE - In this Feb. 10, 2011 file photo, American flags fly in front of the New York Stock Exchange, in New York. U.S. stocks opened higher Monday, Aug. 10, 2015, as investors assessed the latest corporate deal news. Precision Castparts led industrial stocks higher after Warren Buffett's Berkshire Hathaway agreed to buy the maker of aircraft components for $32 billion. (AP Photo/Mark Lennihan, File)
FILE - In this Feb. 10, 2011 file photo, American flags fly in front of the New York Stock Exchange, in New York. U.S. stocks opened higher Monday, Aug. 10, 2015, as investors assessed the latest corporate deal news. Precision Castparts led industrial stocks higher after Warren Buffett's Berkshire Hathaway agreed to buy the maker of aircraft components for $32 billion. (AP Photo/Mark Lennihan, File)

A resurgent energy sector and another big acquisition by Warren Buffett propelled the stock market to its best day in three months on Monday.

Energy stocks jumped, following the price of oil higher. Crude rebounded after dropping to its lowest level of the year in early trading, helping to boost the Dow Jones Industrials Average by 241.79 points, or 1.4 percent, for the first daily gain in eight days on Wall Street.

photo Trader Brandon Barb works on the floor of the New York Stock Exchange Thursday, Aug. 6, 2015. U.S. stocks are edging modestly lower in early trading as investors look over the latest deal and earnings news. Sliding oil prices pulled stocks in energy companies lower. (AP Photo/Richard Drew)

While stock and oil prices rose, gasoline prices continue to decline. A survey released Monday by GasBuddy of 170 gas outlets in Chattanooga showed gas prices fell another 6.4 cents per gallon last week, bringing to average price of a gallon of gas to $2.18 a gallon - or 91.4 cents per gallon less than a year earlier. In just the past month, gas prices in Chattanooga have dropped 22.2 cents per gallon.

GasBuddy analysts predict with oil continuing to fall, gas prices are likely to fall below $2 a gallon by autumn in markets like Chattanooga after the more expensive summer-blend of gas in replaced and vacation travel declines.

Chattanooga gas prices on Sunday already were 42 cents per gallon below the U.S. average of $2.60 per gallon.

"The powerful combination of declining crude oil prices and robust production from U.S. refineries continues to pummel retail gasoline prices nationwide and it's a trend we expect to continue," said Patrick DeHaan, senior petroleum analyst with GasBuddy. "With West Texas Intermediate slipping to $43.75 per barrel on Friday and refineries exceeding 17 million barrels per day in each of the past four weeks, a level that hasn't been reached since the Energy Information Administration began publishing the data in 1990, that explains why the national average price of gas shed 6 cents per gallon in the past week."

Oil prices did increase Monday, rebounding from heavy losses last week. That helped boost energy stocks on Monday by 3 percent as companies including Exxon Mobil and Chevron climbed.

U.S. crude climbed $1.09 to close at $44.96 a barrel in New York. Early Monday oil dipped a penny below its $43.46 March 17 close, its lowest in six years. Brent crude, a benchmark for international oils used by many U.S. refineries, rose $1.80 to close at $50.41 in London.

Despite Monday's rebound, oil is still down almost 60 percent from its peak last year.

About 90 percent of the companies in the S&P 500 have reported their second-quarter results, and average earnings for companies in the index are flat for the period. However, that's masking a big slump in energy company earnings. If the energy sector is excluded, profits rose 7.7 percent, according to S&P Capital IQ data.

That's a good sign for some investors.

"Once you start digging into the numbers the only sector that is really messing things up is energy," said Brad McMillan, Chief Investment Officer for Commonwealth Financial Network. "Everything else is doing pretty well."

Monday's stock gains were the biggest gain since May 8.

The Nasdaq composite climbed 58.25 points, or 1.2 percent, to 5,101.80. The S&P 500 rose 26.91 to 2,104.18.

The gains also ended a seven-day losing streak for the Dow Jones industrial average, its longest run of losses in four years. Some mixed earnings reports and the slump in oil have weighed on the 30-member index in the past three weeks.

Some investors are also anticipating that the Federal Reserve may raise interest rates next month. That's unnerving for them because rates close to zero have been a major factor in driving a bull-market in stocks that has lasted for more than six years.

U.S. government bond prices fell. The yield on the benchmark 10-year Treasury note climbed to 2.23 percent from 2.17 percent on Friday. The dollar rose to 124.62 yen. The euro rose to $1.1019.

The price of gold rose $10 to $1,104.10 an ounce, silver gained 47 cents to $15.29 an ounce and copper increased seven cents to $2.40 a pound.

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