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US stocks ended higher on Wednesday with energy shares posting their biggest one-day gain in eight months, after OPEC collectively agreed to the need to cut production for the first time in eight years.
The S & P 500 energy sector advanced 4.34 per cent buoyed by a rally in crude prices. The US oil benchmark West Texas Intermediate was up 4.9% at $46.86.
The 14-member group reached a consensus that production cuts are needed to support prices and rebalance the market at the conclusion of their informal meeting in Algiers.
Earlier, the US Energy Information Administration reported domestic crude supplies fell by 1.9mln barrels in the week ended Sept. 23. A 3.2mln-barrel rise was expected by analysts.
Nevertheless, in the absence of major disruptions in crude output, oil prices are still poised for their first quarterly decline this year.
The West Texas Intermediate is down 7.8% so far in the third quarter following gains of 3.5% and 26% in the first two quarters of 2016 respectively.
The wider S & P 500 index ended up 0.5% at 2171 and led by a long list of energy stocks. Top of the tree was Murphy Oil Corp (NYSE:MUR) up 11.3% to $28.91 and National Oilwell (NYSE:NOV) up 8.46% to $36.27 and in third place Chesapeake Energy (NYSE:CHK) up 8.35% to $6.75.
Other stocks to command gains of 7% or more were Devon Energy Corp (NYSE:DVN), Marathon Oil Corp (NYSE:MRO) and Diamond Offshore Drilling (NYSE:DO).
The S & P Midcap 400 climbed by 0.8% to 1556 and was led by energy stocks. The top riser was Denbury Resources (NYSE:DNR) catapaulted 21.3% higher to $3.19. Double-digit percentage gains were also experienced by energy groups Noble Corp (NYSE:NE), Sm Energy Company (NYSE:SM) and Nabors Industries (NYSE:NBR).
The S & P Smallcap 600 ended up 0.9% at 758 and led by Communications Components maker Harmonic (NASDAQ:HLIT), up 25.1% to $5.83. But right behind it came the energy stocks, such as number two riser Basic Energy Services (NYSE:BAS) up 19.2% to $0.62.
Open
US stocks extended gains on Wednesday, encouraged by forecast-beating steady durable goods data released earlier.
The S & P 500 index was up 0.1% at 2162 and led by Cintas Corp (NASDAQ:CTAS) up 3.4% at $117.27 after reporting forecast-beating first quarter earnings.
The S & P Midcap 400 was up 0.3% at 1548 and led by Ensco Plc (NYSE:ESV) up 4.3% at $7.57 as the stock continued to rebound after Monday's market sell-off.
US durable goods orders remained stable in August. The Street forecast a 1.5% decline.
Oil prices continue to be in the spotlight as OPEC oil ministers wrap up talks in Algeria.
Hopes for an agreement to freeze production in an effort to boost prices faded on Tuesday, although many analysts predicted they would a week ago. Saudi Arabia said a deal may be possible by November, but key details still need to be worked out. US crude futures, the West Texas Intermediate, were up 1.1% at $45.14.
The US Energy Information Administration was due to report weekly crude oil inventory data within the hour and could affect prices.
Cloud Energy Peak Energy (NYSE:CLD) was the second-highest riser on the S & P Smallcap 600 index, up 5.6% at $4.54 as oil prices gained.
The S & P 600 itself was up 0.3% at 753 and led by Harmonic Inc (NASDAQ:HLIT) up 21% at $5.64. On Tuesday the company announced it had entered into a warrant agreement with Comcast Corporation. The agreement provides Comcast with the opportunity to acquire shares of common stock of Harmonic based on specific CableOS and other Harmonic product sales and deployment milestones during the term of the warrant.
Preview
US stocks are seen extending the previous day's gains on Wednesday, encouraged by forecast-beating steady durable goods data released earlier.
US durable goods orders remained stable in August. The Street forecast a 1.5% decline.
Federal Reserve Chair Janet Yellen will give testimony at 1400 GMT while New York Fed's James Bullard will be speaking at 1415 GMT.
Oil prices continue to be in the spotlight as OPEC oil ministers wrap up talks in Algeria.
Hopes for an agreement to freeze production in an effort to boost prices faded on Tuesday, although many analysts predicted they would a week ago. Saudi Arabia said a deal may be possible by November, but key details still need to be worked out. US crude futures, the West Texas Intermediate, were up 1.1% at $45.15.
Additionally, the US Energy Information Administration is reporting weekly crude oil inventory data at 1030 EDT (1430 GMT), which could affect prices.
In transatlantic takeover news, shareholders in Anheuser-Busch InBev (NYSE:BUD) approved the company's takeover of SABMiller (LON:SAB, OTCMKTS:SBMRY) on Wednesday. The newly combined firm is set to retain the name Anheuser-Busch InBev. The mega £79 billion ($103 billion) deal is expected to go through on October 10. SABMiller shareholders will also vote on the deal Wednesday. SABMiller ADRs were down 0.8% at $57.74 pre-market while Anheuser shares were 0.3% higher at $132.26 pre-market.
Wells Fargo (NYSE:WFC) CEO John Stumpf is forfeiting much of his 2016 salary -- including his bonus and $41mln in stock awards -- as the bank launches a probe into its phony accounts scandal.
The fallout from the controversy has also resulted in its first major executive departure. Carrie Tolstedt, who headed the division that created the fake accounts, has left the company.
Wells shares were up 1.1% at $45.57 pre-market.
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