The U.S. crude oil and iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) edged up 3.8% to $42.63 a barrel, lifting investor sentiment and driving stock prices. The gain in oil was triggered by factors such as a drop in U.S. crude oil production and hints that OPEC members could reopen talks to curb global oil glut. Some investors are also betting that the Federal Reserve officials meeting next week will be more cautious in interest rates adjustments.
In the U.S., finance and energy stocks led the gains, with all the major stock indices continuing their upward rally.
What happened in the blue-chip index?
The Dow Jones Industrial Average (INDEXDJX:.DJI) closed up 0.2% yesterday after adding 42.67 points to 18096.27. During the session, the blue-chip index gained as many as 114 points before giving up some of the gains at the closing bell.
UnitedHealth Group Inc (NYSE:UNH) contributed significantly to the Dow’s Wednesday gains. The company sweetened its 2016 earnings guidance and also announced plans to drop out of the Obamacare exchanges, which has been a source of trouble for it.
The S&P 500
The S&P 500 (INDEXSP:.INX) also ended the day on a positive note, edging 0.1% after adding 1.60 points to 2102.40. Financial and energy shares were the major gainers in S&P 500. Energy stocks, riding on the favorable developments in the oil market in the recent past, rose 0.8% in S&P 500. The unexpected decline in U.S. crude production that fell to the lowest level last seen in October 2014 fueled the gains of oil-linked stocks in S&P 500.
The tech-oriented Nasdaq Composite (INDEXNASDAQ:.IXIC) also advanced, jumping 0.2% after gaining 7.80 points to 4948.13.
In the coming days, investors will be keeping a close eye on restarting of oil curb talks among OPEC members and planned Fed meeting for interest rates review. The 1Q2016 earnings coming out could also affect the direction of U.S. stock movements.