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Morning Dow Report: Oil Lifts Exxon, Chevron; Rising Rates Hurt Travelers

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The holiday-week rally that has sent the Dow Jones Industrials (DJINDICES: ^DJI  ) higher in each of the past six sessions showed some signs of weakening Friday morning, as the Dow gave up early gains to fall three points as of 10:45 a.m. EST. Without any major economic news, year-end optimism allowed stocks to coast higher before falling back to earth, but other financial markets saw more momentous events that helped ExxonMobil (NYSE: XOM  ) and Chevron (NYSE: CVX  ) climb even as Travelers (NYSE: TRV  ) posted declines.

Exxon and Chevron both gained ground Friday morning as the price of front-month futures on West Texas Intermediate crude oil climbed above the $100 mark for the first time since October. Energy prices have risen around the world, with Brent recently climbing above $110 to rival its best levels since before the financial crisis. Exxon's 0.6% gain beat out peer Chevron's rise of 0.3%, continuing the relative outperformance of the larger Dow energy component since Warren Buffett announced his interest in the oil giant. Yet for both Exxon and Chevron, investors are looking for rising energy demand from stronger economies globally to boost both stocks' prospects, potentially opening up new sources of economically viable oil and natural gas for further exploration and production.

Meanwhile, at the other end of the macroeconomic spectrum, interest rates continued moving higher, with the 10-year Treasury yield rising above the 3% mark again. That's bad news for Travelers, which fell 0.5% as investors weighed the potential impact on the insurance giant's bond portfolio. Rate sensitivity sent Travelers into a momentary tailspin at midyear, when the Federal Reserve started contemplating how it would start reducing the amount of support it was giving the economy from quantitative easing. Now that tapering has actually begun, Travelers and other rate-sensitive stocks could see renewed pressure if the bond market panics and sends long-term rate yields much higher.

Is oil the right market to invest in for 2014?
Exxon and Chevron's gains point to the impact that record oil and natural gas production is having on the U.S. and its energy needs. To help you make the most of this opportunity, The Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

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Related Tickers

9/28/2016 1:02 PM
^DJI $18197.01 Down -31.29 -0.17%
CVX $99.53 Up +0.55 +0.56%
Chevron CAPS Rating: ****
TRV $114.40 Down -0.01 -0.01%
The Travelers Comp… CAPS Rating: *****
XOM $84.28 Up +1.04 +1.25%
ExxonMobil CAPS Rating: ****