NEW YORK, Nov 30 — US stocks climbed near historic highs in early trading today on strength in the oil patch as Opec members reached an agreement to cut petroleum production.
The S&P 500 Index surpassed its previous record but then fell back and was up 0.25 per cent at 2,210.21 at 10.01am The Dow Jones Industrial Average shot up 0.4 per cent to a new record of 19,197. The Nasdaq Composite Index rose early but then retreated and was down 0.1 per cent to 5,375.29.
Earlier today, the Organisation of Petroleum Exporting Countries reached an agreement to curtail oil supply by 1.2 million barrels, the first cut in eight years.
“Today, with a significant rally in crude, it’s up about 8 per cent or so, leadership is going to come from energy,” said Yousef Abbasi, a global market strategist at JonesTrading Institutional Services LLC. “There is going to be a positive tail wind off of this”
Energy stocks climbed 4.2 per cent as a group and the companies accounted for the top 10 best movers in the S&P 500. Devon Energy Corp and Marathon Oil Corp and ConocoPhillips paced the gains with both rising more than 12 per cent.
“An agreement on production cuts is positive for oil stocks in the short term, but the upside to oil prices will be limited,” said Heinz-Gerd Sonnenschein, an equity strategist at Deutsche Postbank AG in Bonn, Germany. “US stocks still have further to gain as Trump’s policies seem to be heading in a better direction than people expected before the election.”
Stocks have rallied in November, with all major US indexes touching records, on speculation president-elect Donald Trump will increase fiscal spending to stimulate the world’s largest economy. The S&P 500 has climbed 3.7 per cent, on track for its biggest monthly advance since March.
Reports on pending home sales and the Federal Reserve’s Beige Book are due later today, as well as a private release on employment. Investors are also awaiting the government payrolls data on Friday for clues on the pace of future interest-rate hikes from the Federal Reserve. The probability of a rate increase in December is at 100 per cent, compared with a 68 per cent chance at the start of November. — Bloomberg