Oil recovery drives gains on Wall Street

NEW YORK, NY - MARCH 07: Traders work on the floor of the New York Stock Exchange (NYSE) on March 7, 2016 in New York City. Following a three week surge in stocks, the Dow Jones industrial average was down in morning trading. Spencer Platt/Getty Images/AFP == FOR NEWSPAPERS, INTERNET, TELCOS & TELEVISION USE ONLY ==

NEW YORK: Wall Street was higher on Wednesday morning, led by energy stocks, as oil prices rose on hopes of major producers agreeing to freeze output.

Brent crude hovered above US$40 a barrel on Wednesday.

However, industry watchers remain skeptical of a sustained recovery in prices due to the oversupply.

“Obviously, it’s about oil prices,” said Peter Cardillo, chief market economist at First Standard Financial in New York.

“The market is probably going to have an upward bias for most of the session as investors await the ECB (decision) tomorrow,” he said.

At 9:37am ET (1437 GMT), the Dow Jones industrial average was up 45.78 points, or 0.27%, at 17,009.88, the S&P 500 was up 6.14 points, or 0.31%, at 1,985.4 and the Nasdaq Composite index was up 7.63 points, or 0.16%, at 4,656.46.

All 10 major S&P sectors were higher, led by the 1.2% rise in the energy sector.

Shares of Chevron were up 1.7% at US$90.20, giving the biggest boost to the Dow.

Markets worldwide were lower on Wednesday as investors fretted about global economic conditions ahead of central bank meetings on monetary policies.

While recent data has pointed to a recovery in the US economy, reports out of Asia and the euro zone continue to paint a picture of faltering growth.

The European Central Bank, which will meet later this week, is expected to increase its stimulus programme.

While the US Federal Reserve is not expected to raise interest rates at its meeting on March 15-16, the central bank has said it is on track to raise rates gradually this year.

Valeant was up 4% at US$65.72 after the Canadian drugmaker said it added three new independent directors to its board, including one from Bill Ackman’s Pershing Square Capital Management.

Air Transport Services surged 23.2% to US$14.50 after the lessor said Amazon would lease 20 Boeing 767 freight aircraft.

Chipotle Mexican Grill were down 2.6% at US$511.73. The company, already reeling from several food-borne illnesses, temporarily shut a Massachusetts restaurant after four employees fell sick.

Advancing issues outnumbered decliners on the NYSE by 2,076 to 542. On the Nasdaq, 1,576 issues rose and 582 fell.

The S&P 500 index showed 17 new 52-week highs and one new low, while the Nasdaq recorded 23 new highs and 20 new lows. - Reuters