New York: A surge in oil and gas companies has pulled the stock market out of a five-day slump, as the price of crude swung higher.
Oil prices jumped yesterday after the International Energy Agency predicted drillers would cut production this year. Exxon Mobil, Chevron and other energy companies led all 10 sectors of the Standard & Poor's 500 index to gains, climbing 3 percent.
Oil's seven-month slide had cut its price by more than half.
"Lower oil prices on the whole are supportive of economic growth worldwide," said Jason Pride, director of investment strategy at Glenmede Trust. "They're very helpful for Japan, Europe, China and India. It's clearly a good thing." The S&P 500 index gained 26.75 points, or 1.3 percent, to finish at 2,019.42.
The Dow Jones industrial average climbed 190.86 points, or 1.1 percent, to close at 17,511.57, and the Nasdaq rose 63.56 points, or 1.4 percent, to 4,634.38.
The rally came at the end of another rough week for the market. Since the start of the year, worries about the strength of the global economy and falling oil prices have weighed major indexes down. Even with its strong performance yesterday, the S&P 500 still lost 1 percent for the week, its third straight weekly drop.
"There has been a lot of conflicting information to digest, recently," said Anastasia Amoroso, a global market strategist at JP Morgan Asset Management.
Amoroso said the big question has been whether the recent slump in oil prices will lead to other problems, such as deflation, a downward spiral in prices that could put companies out of business. "Are low oil prices a good or a bad thing?" she asked, rhetorically. "For stocks, deflation is not so great."
Benchmark US crude jumped USD 2.44 yesterday to settle at USD 48.69 a barrel in New York trading. Brent crude, a benchmark for international oils used by many US refineries, added 31 cents to USD 50.17 in London.
