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Wall Street rises with oil prices, earnings optimism


By Sinead Carew

(Reuters) - closed at record highs on Thursday as rising prices lifted energy and investors bet on a strong U.S. corporate earnings season.

The <.SPNY> closed up 2 percent as Brent crude went above $70 a barrel for the first time since December 2014, boosted by a surprise drop in U.S. production and lower crude inventories.

The consumer discretionary sector <.SPLRCD> saw strong gains in media and retail stocks, while the industrials index <.SPLRCI> was helped by airlines after from No. 2 U.S. carrier .

"The unifying factor of today's move and this whole week is a heightened confidence in the pace of economic activity. That helps explain the demand picture, which has up at $70," said Scott Clemons, at in

The <.DJI> rose 205.6 points, or 0.81 percent, to 25,574.73, the 500 <.SPX> gained 19.33 points, or 0.70 percent, to 2,767.56 and the <.IXIC> added 58.21 points, or 0.81 percent, to 7,211.78.

had dropped on Wednesday, the first daily decline for and Nasdaq in 2018, after a report China would slow bond purchases and a report that U.S. would end a key trade agreement.

The major indexes pared gains briefly in late afternoon trading on Thursday after Fed said tax cuts could lead to economic overheating. He predicted above-trend GDP growth with rising inflation in 2018.

"Dudley is touching on something that investors should fear," said Brian Battle, of trading at in "The only threat to the right now is high interest rates. If rates are higher, the present value of equities are too high."

Investors are betting on bullish quarterly earnings reports from big companies and details on savings from federal tax cuts. The reporting season kicks off in earnest on Friday, with results from the big U.S. banks and Wells Fargo & Co .

Earnings for 500 companies are expected to have increased by 11.8 percent in the recently-ended quarter, with the biggest gain from the energy sector, according to I/B/E/S.

"This market feels this week like a deep breath before the onslaught of earnings reports," Clemons said. "This is a wait-and-see mode with a healthy amount of optimism."

shares closed up 4.8 percent at $58.52 after it predicted a double benefit from the U.S. corporate tax cut - savings on its own bill and an uptick in as companies to spend tax savings. It also reported an upbeat quarterly profit.

Delta helped the index <.DJUSAR> close up 4.2 percent. The index <.DJT> rose 2.3 percent - its biggest one-day percentage gain since Nov. 29.

Advancing issues outnumbered declining ones on the NYSE by a 3.40-to-1 ratio; on Nasdaq, a 3.18-to-1 ratio favoured advancers.

The 500 posted 107 new 52-week highs and 8 new lows; the recorded 176 new highs and 18 new lows.

On U.S. exchanges 6.74 billion shares changed hands, above the 6.39 billion average for the last 20 trading days.

(Additional reporting by in Bengaluru; Editing by and Nick Zieminski)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, January 12 2018. 03:08 IST