Wall Street rises as cold wave heats up oil prices | Reuters - Firstpost
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Wall Street rises as cold wave heats up oil prices | Reuters

Updated: Jan 22, 2016 23:00 IST

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U.S. stocks indexes were up about 1.5 percent in early trading on Friday as a cold wave in the United States and Europe helped oil prices surge for a second day.

All 10 major S&P sectors were in the positive territory, led by a 3.85 percent jump in energy stocks.

European Central Bank President Mario Draghi's comments on Thursday suggesting that the bank could ease its monetary policy in its meeting in March also encouraged investors bruised by a brutal selloff that began at the start of 2016.

Crude prices, still under pressure from a global glut, were up more than 6 percent as the cold wave boosted short-term demand and traders cashed in their short positions.

The U.S. stock market, tracking oil prices, has failed to sustain any rallies this year as risk-averse investors search for signs of stability.

The S&P 500 is down 8.6 percent in 2016, having closed higher on only six of the 13 sessions.

"I don't think anybody really expected to see this kind of rout in global equities at the start of the year," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

"At some point, you do shake all the bad blood out and that's what I think the last couple of days were about."

However, concerns about a crude glut and a tepid demand outlook beyond the winter remain. Rating agency Moody's put 120 energy firms across the world on review for downgrades.

At 9:39 a.m. ET (1439 GMT), the Dow Jones industrial average was up 184.42 points, or 1.16 percent, at 16,067.1, the S&P 500 was up 27.39 points, or 1.47 percent, at 1,896.38 and the Nasdaq Composite index was up 74.15 points, or 1.66 percent, at 4,546.20.

All eyes are also on the U.S. Federal Reserve, with expectations rife of the central bank slowing the pace of further rate hikes as it accounts for a weak global economy and inflation remains well below its 2 percent target.

U.S. economic data on Friday is expected to show that existing home sales rose nearly 9 percent in December compared with a 10.5 percent fall in November. The report is due at 10:00 a.m.

Fourth-quarter earnings reports are likely to offer little cheer, with S&P 500 companies on average expected to post a 4.5 percent decline in profit, according to Thomson Reuters data.

Shares of General Electric were down 1.4 percent at $28.18 after the company's quarterly revenue missed analysts' estimates.

American Express was down 8.4 percent at $57.64, while Starbucks declined 1.8 percent to $57.95, after the companies issued disappointing earnings forecasts.

Schlumberger was up 5.6 percent at $64.90 after the world's biggest oilfield services company reported better-than-expected profit and set a $10 billion buyback program.

E*Trade was down 3.5 percent at $23.44 after the company's poor results sparked rating downgrades by at least three brokerages.

Advancing issues outnumbered decliners on the NYSE by 2,673 to 165. On the Nasdaq, 2,044 issues rose and 315 fell.

The S&P 500 index showed two new 52-week highs and three new lows, while the Nasdaq recorded four new highs and 12 lows.

(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Saumyadeb Chakrabarty)

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