Strong recovery in oil prices sent energy shares sharply higher
Wall Street was higher on Wednesday as a strong recovery in oil prices boosted energy shares.
Brent crude extended gains above $40 a barrel, after U.S. crude stockpiles rose in line with estimates last week and gasoline inventories fell more than expected.
Crude oil has rallied in recent weeks, but industry watchers remained skeptical of a sustained recovery in prices as the markets are dealing with a massive oversupply.
The rise in oil prices helped European shares bounce back on Wednesday, even as investors fretted about global economic conditions ahead of central bank meetings on monetary policies.
“It’s the same three culprits that have been driving the first two months of the year and that is – central bank policy, China and oil,” said Bill Northey, chief investment officer of the private client group at U.S. Bank. in Helena, Montana.
At 12:09 p.m. ET, the Dow Jones industrial average .DJI was up 64 points, or 0.38 percent, at 17,028.1, the S&P 500 .SPX was up 10.94 points, or 0.55 percent, at 1,990.2 and the Nasdaq Composite index .IXIC was up 18.43 points, or 0.4 percent, at 4,667.25.
Nine of the 10 major S&P sectors were higher, led by a 2.41 percent rise in the energy sectors .SPNY. Chevron (CVX.N) was up 5.7 percent at $93.86 and gave the biggest boost to the sector.
The European Central Bank, which will make a decision on its monetary policy on Thursday, is expected to increase its stimulus program.
While the U.S. Federal Reserve is not expected to raise interest rates at its meeting on March 15-16, the central bank has said it is on track to raise rates gradually this year.
Biotechs came under pressure after the U.S. government proposed a test program aimed at lowering Medicare drug costs. The Nasdaq Biotechnology sector .NBI was down 1.6 percent.
Amgen’s (AMGN.O) 2.3 percent decline was the biggest drag on the Nasdaq and the S&P 500. Regeneron (REGN.O) was down 4.2 percent and Celgene (CELG.O) fell 2.6 percent.
Chipotle Mexican Grill (CMG.N) was down 4.1 percent at $503. The company, already reeling from several food-borne illnesses, temporarily shut a Massachusetts restaurant after four employees fell sick.
Advancing issues outnumbered decliners on the NYSE by 2,128 to 764. On the Nasdaq, 1,630 issues rose and 1,022 fell.
