Friday 9 December 2016

Wall Street rises as oil soars on hopes of output cut

Published 28/01/2016 | 15:46

AFP PHOTO / TIMOTHY A. CLARYTIMOTHY A. CLARY/AFP/Getty Images
AFP PHOTO / TIMOTHY A. CLARYTIMOTHY A. CLARY/AFP/Getty Images

Wall Street was higher on Thursday morning, tracking a surge in crude oil prices, a day after the U.S. Federal Reserve gave little indication of slowing the pace of future rate hikes.

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Crude was up nearly 6 percent after Russian officials decided to talk to Saudi Arabia and other OPEC countries about cutting output to boost prices. [O/R]

The Fed kept interest rates unchanged and said it was "closely monitoring" global economic and financial developments, while keeping an optimistic view of the U.S. economy.

U.S. stocks closed sharply lower on Wednesday, with the S&P 500 falling more than 1 percent, after the Fed's statement failed to impress some investors.

"The Fed meeting caused some kind of a knee-jerk reaction and the markets need a bit of time to digest what happened yesterday," said Khaldoon Ibrahim, chief executive of MarketsCompass.com, a trading advisory website.

The central bank and investors will now keep a keen eye on economic data and assess corporate earnings reports to gauge the impact from the global turmoil.

"Earnings have been generally good, but the outlook for the second quarter is not good, and that is what is spooking people," said Phil Davis, chief executive of Philstockworld.com.

Data on Thursday showed durable goods orders fell 5.1 percent in December, widely missing expectations of a 0.6 percent decline, while jobless claims fell more than expected to 278,000 last week.

At 9:35 a.m. ET, the Dow Jones industrial average .DJI was up 113.34 points, or 0.71 percent, at 16,057.8, the S&P 500 .SPX was up 17.82 points, or 0.95 percent, at 1,900.77 and the Nasdaq Composite index .IXIC was up 59.12 points, or 1.32 percent, at 4,527.29.

Nine of the 10 major S&P sectors were higher, led by the 3.55 percent rise in energy stocks .SPNY.

Caterpillar (CAT.N) was up 6.1 percent at $61.86, while Under Armour (UA.N) soared 17 percent to $80.50 after both companies reported better-than-expected profit.

Facebook (FB.O) surged 13.4 percent to $107.07 after the world's biggest social network reported a 52 percent jump in revenue.

EBay (EBAY.O) sank 10.6 percent to $23.62 after it forecast weaker-than-expected quarterly revenue and profit.

PayPal (PYPL.O), which was spun-off from eBay last year, was up 8.2 percent at $34.14 after its revenue beat estimates.

Juniper Networks (JNPR.N) was down 11.5 percent at $23.50 and Qualcomm (QCOM.O) was off 3.6 percent at $45.78 after both companies issued grim forecasts, prompting a slew of rating downgrades.

Tech heavyweights Microsoft (MSFT.O) and Amazon (AMZN.O) are among companies due to report results after the close.

Advancing issues outnumbered decliners on the NYSE by 2,347 to 316. On the Nasdaq, 1,794 issues rose and 416 fell.

The S&P 500 index showed no new 52-week highs and seven new lows, while the Nasdaq recorded four new highs and 21 lows.

Reuters

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