U.S. stocks rose Tuesday amid investor hope that the scheduled meeting of major oil producers would start the process of curbing the oil glut that has ravaged oil prices. Crude oil prices in the U.S. jumped 4.5% to touch a new multi-month high. Energy stocks rallied the most in the S&P 500 followed by financials. The gain in financial stocks signals easing investor concern over the quality of energy loans.
Crude oil for May delivery added $1.81 to $42.17 per barrel, hitting its highest price level since November 25. The surge in crude prices lifted energy shares alongside bank shares. The energy sector of the S&P 500 gained 2.8%, emerging as the best performing sector overall. Chevron Corporation (NYSE:CVX) was the day’s top gainer on the Dow Industrials, edging up 2.4%.
The financial sector gained 1.3% to emerge as the second-best performing sector in the S&P 500 this year.
The Dow Jones Industrial Average added 164.84 points for a 0.9% gian to finish the day at 17721.25, registering its largest single-day gain since March 11. The S&P 500 was up by 19.73 points or 1% to close the day at 2061.72. The Nasdaq Composite Index gained 38.69 points or 0.8% to conclude the day at 4872.09.
All sectors in S&P 500 gained and all of the Dow 30 companies rose the first time since February 25.
Appetite for safe haven assets remains
Despite the surge in stocks triggered by hopes that major oil producers could cut output to help prices, interest in safe haven assets remained high. Prices for U.S. government bonds and gold ticked up, suggesting that investors are still skeptical of the stability of energy stocks.
The prices of U.S. government debt declined as the yield on the 10-year bond jumped to 1.781%. In the gold market, gold for April delivery rose 0.2% to $1,259.40 per troy ounce.