US stocks advanced, boosted by energy shares as oil surged after President Donald Trump said Russia and Saudi Arabia would announce production cuts. Treasuries fell and the dollar rose.
The S&P 500 Index gained for the first time in three days after Trump said he expects the two countries to cut crude output by about 10 million barrels after he spoke by phone with Crown Prince Mohammed Bin Salman on Thursday.
West Texas crude surged more than 20% to above $25 a barrel, while Chevron Corp. led all gainers on the benchmark. Earlier, oil rallied after China said it would buy it for its reserves. The commodity is still down around 60% for the year. Ten-year Treasury yields rose, and the dollar gained against the yen.
“It’s a good stabilization. It’s optimism that with the oil industry employing 10.3 million Americans it’s a step in the right direction,” said Gene Goldman, chief investment officer at Cetera Financial Group. “We are so tied to the oil industry.”
Stocks rise as oil surges on potential supply cuts
After enduring their worst quarter since 2008, stocks are struggling for traction as companies move to slash dividends and more U.S. states enact severe restrictions on movement to curb the coronavirus pandemic. Initial jobless claims Thursday that showed record high numbers emphasized the uncertainties surrounding the economic toll. However, rebounding oil prices could help damp the impact by buoying a beaten up sector of the economy.
“The incremental news on the virus in the last 24 to 48 hours has been disappointing,” John Porter, a fund manager at Mellon Investments Corp., said on Bloomberg TV. “The global economy has hit a wall, there’s a tremendous amount of uncertainty, and that’s contributing to the volatility.”
These are the main moves in markets:
-The S&P 500 Index rose 1.8% of 12 p.m. New York time.
-The Stoxx Europe 600 Index gained 0.2%.
-The MSCI Asia Pacific Index fell 0.4%.
-The Bloomberg Dollar Spot Index climbed 0.2%.
-The euro declined 0.9% to $1.0864.
-The British pound was little changed at $1.2366.
-The Japanese yen fell 0.7% to 107.96 per dollar.
-The yield on 10-year Treasuries increased two basis point to 0.60%.
-Germany’s 10-year yield rose two basis points to -0.44%.
-Britain’s 10-year yield climbed one basis point to 0.322%.
-Gold rose 2.4% to $1,629.80 an ounce.
-West Texas Intermediate crude increased 24% to $24.28 a barrel.
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