Friday was a good day for the stock market, with the S&P 500 coming within 1% of a record high and the Dow Jones Industrial Average finishing up by more than 250 points. Favorable earnings lifted many companies in the financial sector, and investors seemed more confident that the state of the U.S. economy might be stronger than originally thought. A major acquisition in energy also provided upward support for companies in that sector. PG&E (NYSE: PCG), Pioneer Natural Resources (NYSE: PXD), and Adient (NYSE: ADNT) were among the top performers. Here's why they did so well.
PG&E gets some help
Shares of PG&E soared over 19% after the beleaguered utility got some good news from the California state government. Gov. Gavin Newsom released a report that suggested that liability for the devastating fires that ravaged the state in the past couple of years shouldn't be put solely on the utility company but rather spread out among multiple stakeholders, including utility customers. PG&E had sought bankruptcy protection as it sorted out liability claims, which under current California state law includes strict liability for damage caused by its equipment. The governor's report increases the odds that shareholders will retain some value in their stakes after bankruptcy, although there's still a long way to go before any final resolution.
Pioneer rides energy's coattails
Pioneer Natural Resources saw its stock climb 11.5% following good news from elsewhere in the energy sector. Chevron announced that it would acquire Anadarko Petroleum in a deal worth roughly $33 billion, and that raised the possibility that other major oil companies would look to acquire smaller players of roughly the same size as Anadarko to grow their asset holdings. Anadarko and Chevron have some unusual synergies at play, so it's far from certain that a bidder will emerge for Pioneer or other companies in the space. Nevertheless, Pioneer shareholders seem optimistic, and with oil prices on the rise, the M&A news was just another catalyst to push the overall sector higher.
Adient drives higher on positive comments
Finally, shares of Adient picked up almost 14%. The maker of automotive seating solutions earned positive comments from stock analysts at BofA Merrill Lynch, including an upgrade from neutral to buy and a $6 increase in the price target to $25 per share. Despite its recent struggles, Adient is poised to recover in the near future, according to the analysts, with the potential to refinance debt and buy time for the company's new CEO to implement a turnaround strategy. Economic challenges overseas won't go away overnight, but shareholders do seem more optimistic that Adient will be able to navigate shifting conditions in the auto industry and get moving in the right direction again.
Offer from The Motley Fool: The 10 best stocks to buy now
Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. In fact, the newsletter they run, Motley Fool Stock Advisor, has quadrupled the S&P 500!*
Tom and David just revealed their ten top stock picks for investors to buy right now.
Click here to get access to the full list!
*Stock Advisor returns as of Jan. 31, 2019.
Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool recommends Adient. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.