Wall Street climbs with oil, but Facebook's slide checks gains

By Sruthi Shankar

(Reuters) - U.S. stocks rose on Tuesday as a jump in oil prices lifted energy stocks, though another drop in Facebook's shares curbed the gains on the Nasdaq Composite and the S&P.

Facebook's shares fell 5.2 percent on a Bloomberg report that the U.S. Federal Trade Commission was investigating the company over its use of personal data after a whistleblower said a political consultancy improperly accessed information on 50 million users to sway public opinion.

The stock sank almost 7 percent on Monday, sparking a broad sell-off. U.S. and European lawmakers have demanded an explanation of how the consultancy gained access to the data and why Facebook failed to inform its users, raising broader industry questions about consumer privacy.

Shares of Snap fell nearly 4 percent, while Twitter's shares tumbled 9.2 percent. The S&P technology index was down 0.2 percent.

"Not all the overhang has cleared, there's still some anxiety. But as a whole, we still think the space has a lot of upside and are constructive on tech," said Josh Navarro, global investment specialist at J.P. Morgan Private Bank.

At 12:46 p.m. ET, the Dow Jones Industrial Average was up 0.5 percent at 24,734.27. The S&P 500 gained 0.13 percent to 2,716.54 and the Nasdaq Composite rose 0.24 percent to 7,361.58.

Still, the declining stocks outnumbered the stocks that gained on the NYSE for a 1.19-to-1 ratio, and for 1.13-to-1 ratio on the Nasdaq.

Oil prices rose about 2 percent, helped by tensions in the Middle East and the possibility of further falls in Venezuelan output.

The gains helped the S&P energy index up 1.05 percent, easily the biggest gain among the 11 major S&P sectors.

Financial stocks edged up 0.4 percent as investors prepare for a near-certain interest rate hike at the end of the Federal Reserve's two-day meeting on Wednesday.

But the bigger question is how aggressive the central bank will be with monetary policy after that, as it gradually ends a nine year run of easy money for the financial system.

Traders currently expect two more rate hikes this year, although they said policymakers could set a hawkish tone by forecasting four increases in their "dot plot" projections.

"Our base case is the Fed would raise four times this year, and that would not have a material impact to the equity markets to the upside," said Navarro.

Oracle dropped 9.3 percent after the business software maker reported lower-than-expected quarterly revenue.

Shares of defense companies gained after Reuters reported Trump plans to boost the exports of lethal drones to more U.S. allies. Kratos Defense rose 4 percent and Boeing gained 1.7 percent.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Savio D'Souza and Dan Burns)