US Stocks ended higher, fueled by advances in energy shares as crude oil shot to a 2015 high and speculation that first quarter corporate earnings might not be as bad as expected.
The Standard and Poor’s 500 index closed 10.78 or 0.5% higher on the day at 2106.62 points leaving it less than half a percentage below its record close. Al the 10 major sectors of the benchmark indexes recorded gains led by the energy sector with a 1.89% gain.
Oil in the US jumped by 4% after government data showed that the country’s stockpiles had built up at a slower than expected rate.
Investors had feared that the currently underway earnings season would e weighed down by oil prices, a robust dollar and extreme weather in the Eastern US.
But according to data from Thompson Reuters, of the 36 companies in the benchmark index, more than 81% have topped forecasts. This is better than the average 63% that tops expectations in a typical quarter.
“Management has done a good job guiding market expectations to an appropriate level, and now they’re stepping over a lowered bar,” Alan Gayle, senior investment strategist and director of asset allocation at RidgeWorth Investments in Atlanta, Georgia, told Reuters.
“Fundamentals in the equity market remain good.”
The Dow Jones Industrial Average gained 75.71 points r o.4% to close at 18,112.41 with more than 60% of its components recording gains.
The Nasdaq Composite advanced 33.73 points or 0.7% to close at 5011.12 to put it within its record close of 5048.62 points recorded in 2000.
The Russell 2000 index of Small Companies climbed 10 points or 0.8% to its record close of 1275.35.
“The main reason equity markets are inching higher in an environment where the economic growth is decelerating and earnings falling, is because of monetary policy of abundant liquidity from the ECB, Bank of Japan and even the Federal Reserve,” James Abate, chief investment officer at Centre Funds, with over $1 billion in assets under management, told MarketWatch.
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