XOM Exxon Mobil Corp

By Ellie Ismailidou and Barbara Kollmeyer, MarketWatch

Market shrugs off better-than-expected durable-goods data; energy sector struggles to push higher

U.S. stocks rallied Thursday afternoon as a rebound in oil prices boosted the main benchmarks, which had been struggling to hold on to small gains throughout the session.

The S&P 500 gained 14 points or 0.8% to 1,944, led by materials and financials. The Dow Jones Industrial Average added 151 points, or 0.9%, at 16,636, led by a 4.4% rise in United Technologies Corporation (UTX).

Meanwhile, the Nasdaq Composite reversed losses to trade 17 points, or 0.4%, higher at 4,560.

Oil prices (http://www.marketwatch.com/story/crude-oil-steady-as-investors-weigh-latest-inventory-build-2016-02-25) erased steep losses to end sharply higher Thursday, after news reports said Venezuela's oil minister announced his country would meet with fellow oil producers next month in an effort to stabilize prices.

The recovery in oil prices sparked a stock-market rebound for a second session in a row. On Wednesday, stocks closed with modest gains (http://www.marketwatch.com/story/dow-futures-slump-more-than-100-points-as-oil-dives-again-2016-02-24), reversing sharper initial losses after a rebound in oil prices late in the session.

Read:Low oil prices may signal end of economic weakness, not beginning (http://www.marketwatch.com/story/low-oil-prices-may-signal-end-of-economic-weakness-not-beginning-2016-02-24)

However these moves are "unlikely to drive [equity] markets higher in a sustainable way" while the oil market remains in a supply glut and no major oil producer is willing to cut production, said Karyn Cavanaugh, market strategist at Voya Investment Management.

In fact, the energy sector was the worst performer on the S&P 500, down 0.2%, while energy giant Exxon Mobil Corp (XOM) was leading the Dow industrials decliners.

On the U.S. economic front, a report showed that January U.S. orders for durable goods (http://www.marketwatch.com/story/durable-goods-orders-surge-49-in-january-2016-02-25) posted their biggest gain 10 months, but did little to boost stock-buying sentiment.

Within the report, shipments of nondefense capital goods excluding aircraft were negative, in line with economists' expectations. That figure is a closely watched barometer of broader business demand and this reading could cut in to the first-quarter outlook for gross domestic product, according to Phil Orlando, equity market strategist at Federated Investors, which could help explain the market's muted reaction.

The data were "better than expected across the board," except for "the only number in the durable-goods report that feeds in to the gross domestic product," said Orlando.

Adding to the bearish sentiment Thursday was a 6.4% plunge for the Shanghai Composite (http://www.marketwatch.com/story/asian-stocks-mixed-as-china-prepares-for-g20-2016-02-24), the biggest one-day percentage drop since Jan. 26. The selloff was pinned on a range of reasons, including concerns about tighter liquidity in the market and investors pulling money out of stocks in the country.

"Comments by [the People's Bank of China's] deputy governor that the bank expects oil imports to rise did very little to calm the equity selloff," wrote Charalambos Pissouros, senior technical analyst at IronFX Global, in a note to clients.

The Stoxx Europe 600 index surged 2% to break a two-day run of losses (http://www.marketwatch.com/story/european-stocks-on-track-to-break-two-day-run-of-losses-2016-02-25), with bank and commodity shares catching a break from recent declines. Markets were also starting to fixate on a Group of 20 meeting in Shanghai on Friday, where some expect China will address worries about its economy.

Read:Everyone's on the hot seat as the G-20 comes to Shanghai (http://www.marketwatch.com/story/everyones-on-the-hot-seat-as-g-20-comes-to-shanghai-2016-02-23)

Elsewhere, the dollar inched lower and gold ended flat (http://www.marketwatch.com/story/gold-prices-take-a-breather-after-2-day-run-2016-02-25) after a two-day gain.

Economy: The number of Americans who applied for unemployment benefits (http://www.marketwatch.com/story/jobless-claims-climb-10000-to-272000-2016-02-25)last week rose slightly, the U.S. government said Thursday. But the four-week average of claims fell to its lowest since early December, indicating that companies are sticking to current employment levels despite slower U.S. economic growth and stock market turmoil in early 2016.

Federal Reserve Bank of St. Louis President James Bullard reiterated late Wednesday that the pressure has eased off (http://www.marketwatch.com/story/feds-bullard-again-says-its-unwise-to-raise-rates-2016-02-24) the central bank to raise rates. Then on Thursday, Bullard said in an interview on CNBC that the U.S. central bank deserves some blame for the stock-market selloff (http://www.marketwatch.com/story/fed-deserves-some-blame-for-market-selloff-bullard-2016-02-25-81035252)in the wake of its December interest-rate hike.

Stocks to watch: Best Buy Co. (BBY) reversed losses to gain 2.4% despite the fact that the electronics retailer announced profit in its latest quarter slid (http://www.marketwatch.com/story/best-buy-profit-slides-warns-of-weak-sales-2016-02-25) after sharp drops in demand for mobile phones.

Read: Warren Buffett's stock picks crush Carl Icahn's so far in 2016 (http://www.marketwatch.com/story/warren-buffetts-stock-picks-beat-carl-icahns-so-far-in-2016-2016-02-24)

Kohl's Corp. (KSS) met consensus on same-store sales and said it would buy back up to $600 million of its own shares. The company's shares gained 2.2%.

Campbell Soup Co. (CPB) gained 2.9% after its profit inched higher (http://www.marketwatch.com/story/campbell-soup-profit-rises-above-expectations-2016-02-25) as falling expenses offset a decline in revenue.

Kraft Heinz Co. (KHC), Gap Inc. (GPS) and Intuit Inc. (INTU) are due after the close.

Foxconn Technology Co. (2354.TW) assembler for Apple Inc.'s (AAPL) said Thursday that it is delaying the signing of a takeover deal with Sharp Corp. (6753.TO). Citing sources, The Wall Street Journal said (http://www.wsj.com/articles/sharp-accepts-foxconns-6-25-billion-takeover-offer-1456367642) the deal was put on ice after Foxconn reviewed future financial risk for Sharp. Foxconn inched 0.3% higher while Sharp lost 14%.

(END) Dow Jones Newswires

February 25, 2016 15:29 ET (20:29 GMT)

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