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US: Wall St rises as oil soars on hopes of output cut

Thursday, January 28, 2016 - 23:02
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Wall Street was higher on Thursday morning, tracking a surge in crude oil prices, a day after the US Federal Reserve gave little indication of slowing the pace of future rate hikes.

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

Crude was up nearly 6 per cent after Russian officials decided to talk to Saudi Arabia and other Opec countries about cutting output to boost prices.

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

US stocks closed sharply lower on Wednesday, with the S&P 500 falling more than 1 per cent, 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 per cent in December, widely missing expectations of a 0.6 per cent decline, while jobless claims fell more than expected to 278,000 last week.

At 9:35 am ET (1435 GMT), the Dow Jones industrial average was up 113.34 points, or 0.71 per cent, at 16,057.8, the S&P 500 was up 17.82 points, or 0.95 per cent, at 1,900.77 and the Nasdaq Composite index was up 59.12 points, or 1.32 per cent, at 4,527.29.

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

Caterpillar was up 6.1 per cent at $61.86, while Under Armour soared 17 per cent to $80.50 after both companies reported better-than-expected profit.

Facebook surged 13.4 per cent to $107.07 after the world's biggest social network reported a 52 per cent jump in revenue.

EBay sank 10.6 per cent to $23.62 after it forecast weaker-than-expected quarterly revenue and profit.

PayPal, which was spun-off from eBay last year, was up 8.2 per cent at $34.14 after its revenue beat estimates.

Juniper Networks was down 11.5 per cent at $23.50 and Qualcomm was off 3.6 per cent at $45.78 after both companies issued grim forecasts, prompting a slew of rating downgrades.

Tech heavyweights Microsoft and Amazon 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